Japanese trading firm Marubeni Corporation (8002.T) will acquire a controlling interest in the California-based wind energy generator Oak Creek.
The transaction will occur through a $16.6 million equity investment in Oak Creek Holdings, Inc., a newly formed parent holding company.
Oak Creek, which develops and operates wind energy projects, will also have the opportunity to be Marubeni’s exclusive wind energy development partner for North America.
Oak Creek is one of the longest-running wind energy generators in the Tehachapi region of Southern California and currently has more than 5,000 megawatts (MW) of wind energy projects in its development pipeline in the US Southwest. Significant among them is the Alta Wind Energy Center project in Kern County, California. Development there is being undertaken by Alta Innovative Power Company LLC, Oak Creek’s joint venture with Allco Finance Group of Sydney, Australia.
When completed, Oak Creeks says the Alta Wind Energy Center will provide the generation capacity for a 1,550 MW power purchase agreement with Southern California Edison, which is considered to be one of the largest contracts of its type in the country.
The Alta Wind Energy Center will be constructed over several years as transmission capacity becomes available from the Tehachapi Renewable Transmission Project. In addition, the Alta joint venture is also currently constructing the Alite Wind project in Mojave, a 24 MW project that will sell energy to California Portland Cement Company for consumption by its Mojave cement plant.
The transaction has been structured as a reorganization, pursuant to which Marubeni will purchase Series A Preferred Stock and warrants of Oak Creek Holdings, Inc. for an aggregate purchase price of $16.6 million, or $16.29 per share, representing approximately 55.4% of the outstanding shares, on a fully diluted basis.
Existing shareholders of Oak Creek will exchange their common stock on a one-for-one basis in the merger for shares of common stock in the new parent holding company. In connection with the transaction, Oak Creek will repurchase shares currently held by its largest shareholder, which are valued at $3.8 million and represent approximately 24% of Oak Creek’s outstanding shares.
About Marubeni Corporation:
Marubeni is a Japanese trading firm and operates in various industries from textile to exploration of natural resources. Among 11 business divisions in Marubeni’s organization, the Power Division is one of its core divisions and the investment in overseas independent power generation projects is identified as a Growing Core Business. Marubeni’s Power Project Division investments include 18,523 MW of Domestic and Overseas Projects, including wind energy projects.
About Oak Creek Energy Systems:
Oak Creek is located in Mojave, California and is a wind energy pioneer, beginning with one of the first wind farms built in California in early 1982. The company has long played an active role in the wind energy industry and has worked to advance major transmission improvements to the Tehachapi area, which will also provide major benefits to the California power grid.
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