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Press release from Marketwire

Enbridge Income Fund Holdings Board Approves $1.23 Billion Renewable Energy Portfolio Acquisition

Enters into Bought Deal Agreement to sell $219.5 Million of Subscription Receipts

Thursday, September 08, 2011

Enbridge Income Fund Holdings Board Approves $1.23 Billion Renewable Energy Portfolio Acquisition16:16 EDT Thursday, September 08, 2011CALGARY, ALBERTA--(Marketwire - Sept. 8, 2011) -NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER U.S. NEWSWIRE SERVICESFurther to the proposal announced on May 4, 2011, Enbridge Income Fund Holdings Inc. (the "Company") (TSX:ENF) and Enbridge Income Fund (the "Fund") announced today the board of trustees of Enbridge Commercial Trust ("ECT"), on behalf of the Fund, approved the acquisition by the Fund of three renewable energy assets from Enbridge Inc. (TSX:ENB)(NYSE:ENB) ("Enbridge") for approximately $1.23 billion (the "Transaction") and the board of directors of the Company approved the offering of common equity to finance the Company's related investment in the Fund. The Company also announced today that it has executed a binding agreement with a syndicate of investment dealers led by RBC Capital Markets, Scotia Capital Inc. and TD Securities, Inc. for the sale on a bought deal basis of an aggregate of 11,707,000 subscription receipts ("Subscription Receipts") at a price of $18.75 per Subscription Receipt, for gross proceeds of $219.5 million.The Company will seek the approval of shareholders (excluding Enbridge and its affiliates) at a special meeting to be held on October 17, 2011. Subject to completion of the financing and receipt of regulatory and third party approvals, if shareholder approval is obtained the Transaction is expected to close shortly thereafter.The Company is a publicly traded corporation that holds high quality energy infrastructure assets through its investment in the Fund. The renewable energy assets to be acquired by the Fund consist of 100% interests in the 190-MW Enbridge Ontario Wind Project, the 99-MW Talbot Wind Project and the 80-MW Sarnia Solar Project, which is the largest operating photovoltaic solar facility in the world. The facilities are long-lived with future power sales contracted under separate long-term power purchase agreements with the Ontario Power Authority with remaining terms exceeding 17 years. The facilities also have long-term operating and maintenance contracts mitigating operational risks and providing operating cost certainty. Enbridge and its affiliates will continue to manage the renewable energy assets pursuant to a five-year renewable management and administration agreement. Collectively, the assets to be acquired are expected to generate within the Fund earnings before interest, taxes, depreciation and amortization (EBITDA) of $111 million per year on average over a ten year period.Special Committee RecommendationIn May 2011, the Company and the Fund announced receipt of a proposal involving the indirect acquisition by the Fund of a portfolio of wind and solar power generation facilities presently indirectly owned and operated by Enbridge. A joint Special Committee of independent directors of the Company and independent trustees of ECT on behalf of the Fund was formed to review and evaluate the proposal with independent technical, legal, tax and financial advisors, including CIBC World Markets Inc. ("CIBC"), which provided a valuation of the renewable energy assets and a fairness opinion.Based on its evaluation, and reflecting advice from its advisors, the joint Special Committee negotiated modified terms with Enbridge, recommended approval of the indirect acquisition of interests in entities that own the renewable energy assets by the Fund and the related transactions, concluded that the Transaction is in the best interests of the Fund, ECT and the Company and is fair to the Company, and recommended that the board of directors of the Company recommend that shareholders of the Company approve the Transaction.Benefits to Shareholders"These assets are an excellent fit with the Fund," said John Whelen, President, Enbridge Income Fund Holdings Inc. "They provide immediate scale, diversity and growth and will significantly expand our green power business, bringing our interests to 405 MW of generation capacity. The green power business will now be comparable with each of our existing gas transmission and crude oil transportation businesses in size and cash flow contribution."The transaction is expected to be accretive to the Company's cash flow by approximately 7.5% per share on a long-term basis, better than estimates provided when the transaction was originally proposed," said Mr. Whelen.Special Meeting of Enbridge Income Fund Holdings Inc. ShareholdersThe Company will seek the approval of shareholders (excluding Enbridge and its affiliates) at a special meeting to be held on October 17, 2011. Shareholders of record on September 16, 2011 will be entitled to attend and vote at the meeting. Subject to receipt of regulatory and third party approvals, if minority shareholder approval is obtained at the special meeting, it is anticipated that the Transaction will close as soon as practicable thereafter.To assist shareholders in their assessment of the Transaction, the CIBC valuation of the renewable energy assets and fairness opinion, which were among a number of factors taken into consideration by the Special Committee in recommending approval of the Transaction, will be summarized and published in the Management Information Circular ("Circular") to be filed publicly and mailed to shareholders of record in mid to late September 2011.Shareholders are encouraged to carefully review and consider the Circular. The Circular, valuation and fairness opinion will be filed on SEDAR at www.sedar.com prior to the record date for the meeting.Based on the Special Committee's recommendation, the board of directors of the Company has unanimously (with directors who are directors and/or officers of Enbridge abstaining) concluded that the Transaction is in the best interests of the Company and is fair to the Company, and recommends that shareholders vote in favour of the resolution approving the Transaction.Financing of the TransactionThe Fund intends to finance the Transaction through a combination of debt and equity.Equity financing is expected to be provided through the issuance of Fund trust units to the Company and preferred units of ECT to Enbridge. In its May 4th proposal, Enbridge had committed to acquire its pro rata share of any Fund trust units issued in connection with this Transaction, but had agreed to waive its pre-emptive right if the Company wished to take up a larger portion of the common equity. The Company has elected to acquire all Fund trust units issued in connection with this Transaction.Long-term debt is expected to be provided to the Fund by Enbridge as set out in the table and described below.Fund Sources of Financing----------------------------------------------------------------------------(millions of Canadian dollars)Fund trust units (14,616,000 units at $18.75 per unit) $ 274Preferred Units of ECT issued to Enbridge (16,051,000 units at $18.75 per unit) 301Long-term debt issued to Enbridge 655---------------------------------------------------------------------------- 1,230 --------------------------------------------------------------------------------------------------------------------------------------------------------All of the Fund trust units will be issued to the Company at a price of $18.75 per unit. Enbridge will subscribe for 16,051,000 preferred units of ECT at a price of $18.75 per unit. Enbridge will also provide the Fund with a $655 million unsecured, subordinated 10-year loan at a fixed interest rate of 6% per annum. The loan may be prepaid without penalty at any time.The Company will finance its $274 million investment in the Fund trust units through the issuance of $219.5 million of common equity (via subscription receipt offering) to the public and $54.5 million of common equity to Enbridge, which will maintain its 19.9% interest in the Company. The Company will issue 2,909,000 common shares of the Company ("Common Shares") to Enbridge at the same price as the subscription receipts offered to the public concurrent with the exchange of such subscription receipts for Common Shares.Should the transaction be approved by shareholders as contemplated, the Company's holdings will increase from 72.6% to 80.7% of the issued and outstanding Fund trust units and, correspondingly, Enbridge's direct holding of Fund trust units will be reduced from 27.4% to 19.3%. Enbridge's economic interest in the Fund as a whole, as represented by its direct ownership of Fund trust units and preferred units of ECT, as well as its interest held indirectly through Common Shares of the Company, will be reduced from 72% to 69%.Offering of Subscription ReceiptsThe Company has agreed to sell an aggregate of 11,707,000 Subscription Receipts at a price of $18.75 per Subscription Receipt to a syndicate of investment dealers, led by RBC Capital Markets, Scotia Capital Inc. and TD Securities Inc., (the "Underwriters") on a bought deal basis for gross proceeds of $219.5 million (the "Offering").Each Subscription Receipt will be automatically exchanged immediately prior to closing of the Transaction and upon satisfaction of certain escrow release conditions for one Common Share without any further action or additional consideration on the part of the holder. In the event that the Transaction closes prior to the Termination Date (as defined below), holders of Subscription Receipts at the time of the exchange into Common Shares will be eligible to receive payments in an amount equal to any dividends paid or payable to holders of the Common Shares relating to any record date occurring on or after the date of issuance of the Subscription Receipts and up to the date of the exchange of Subscription Receipts into Common Shares. Holders of the Subscription Receipts will receive such payments upon the later of the date of exchange of the Subscription Receipts into Common Shares and the payment date of the dividends.The proceeds from the sale of Subscription Receipts will be held by an escrow agent and invested in short-term obligations of, or guaranteed by, the Government of Canada (and other approved investments) until the earlier of the closing of the Transaction and December 31, 2011 (the "Termination Date"). If the closing of the Transaction does not occur on or before the Termination Date, or is terminated at any earlier time, the Subscription Receipts will be terminated and cancelled, and the full purchase price of the Subscription Receipts will be returned to holders of Subscription Receipts, together with their pro rata portion of interest earned thereon.The Subscription Receipts will be offered in all provinces of Canada by means of a short form prospectus and in the United States to Qualified Institutional Buyers pursuant to the registration exemptions provided by Rule 144A of the Securities Act of 1933 and internationally as permitted. Closing of the Offering is subject to certain conditions, including receipt of the approval of the Toronto Stock Exchange (the "TSX") and all other necessary regulatory approvals.This press release shall not constitute an offer to sell, or the solicitation of an offer to buy, any securities in any jurisdiction. The Subscription Receipts being offered have not been and will not be registered under the U.S. Securities Act of 1933 and state securities laws. Accordingly, the Subscription Receipts may not be offered or sold to U.S. persons except pursuant to applicable exemptions from registration requirements. Application will be made to list the Subscription Receipts and the Common Shares issued upon exchange of the Subscription Receipts on the TSX.ASSET PROFILES:Sarnia Solar Energy ProjectLocation: Sarnia, OntarioIn-service date: September 2010Total installed capacity: 80 megawattsNumber/type of panels: approx. 1.3 million thin film photovoltaic modules (First Solar)Operator: First Solar under contract to Enbridge Inc. Customers: Ontario Power Authority under a 20-year power purchase agreement under the Renewable Energy Standard Offer ProgramEquivalent homes served(i): 12,800CO2 savings (tonnes)(ii): 39,000Ontario Wind Energy ProjectLocation: near Kincardine, OntarioIn-service date: August 2008; fully completed February 2009Total installed capacity: 190 megawattsNumber/type of turbines: 115 Vestas V82 turbinesOperator: Enbridge Inc. Customers: Ontario Power Authority under a 20-year power purchase agreementEquivalent homes served: 60,000CO2 savings (tonnes): 180,000Talbot Wind Energy ProjectLocation: near Chatham, OntarioIn-service date: December 2010Total installed capacity: 99 megawattsNumber/type of turbines: 43 Siemens 2.3 MW turbinesOperator: Siemens under contract to Enbridge Inc. Customers: Ontario Power Authority under a Renewable Energy Supply (RES) III 20-year power purchase agreementEquivalent homes served: 33,000CO2 savings (tonnes): 106,600(i) The equivalent number of homes that could be served by the electricity generated by the facility operating at maximum capacity. (ii) A measure of the average amount of CO2 emissions that would have been created by the generation of an equivalent amount of power by a fossil fuel plant.ABOUT ENBRIDGE INCOME FUND HOLDINGS INC.Enbridge Income Fund Holdings Inc. (the "Company") is a publicly traded corporation. The Company, through its investment in Enbridge Income Fund (the "Fund"), holds high quality energy infrastructure assets. The Fund's assets include a 50% interest in the Canadian segment of the Alliance Pipeline, a 100% interest in the various pipelines comprising the Saskatchewan System, a 50% interest in each of NRGreen Limited Partnership and the Sunbridge wind project as well as a 33% interest in each of the Magrath and Chin Chute wind projects. Information about Enbridge Income Fund Holdings Inc. is available on the Company's website at www.enbridgeincomefund.com.Certain information provided in this news release constitute forward-looking statements. Forward looking statements are typically identified by words such as "contemplate", "anticipate", "expect", "project", "estimate", "forecast" and similar words suggesting future outcomes or statements regarding an outlook. Although the Company believes that these statements are based on information and assumptions which are current, reasonable and complete, these statements and assumptions are necessarily subject to a variety of risks and uncertainties pertaining to operating performance, regulatory parameters, weather, economic conditions and commodity prices. You can find a discussion of those risks and uncertainties in our Canadian securities filings. While the Company makes these forward-looking statements in good faith, should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results, including with respect to expected earnings and associated per share amounts, or estimated future dividends, may vary significantly from those expected. Readers are cautioned against placing undue reliance on forward-looking statements. Except as may be required by applicable securities laws, the Company assumes no obligation to publicly update or revise any forward-looking statements made herein or otherwise, whether as a result of new information, future events or otherwise.NON-GAAP MEASURESThis News Release contains references to the expected EBITDA to be generated by the renewable energy assets. EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Management believes that EBITDA is a useful supplemental measure as it provides an indication of the renewable energy assets' operating results prior to consideration of how those activities may be financed or how the results may be taxed. This measure has been described in this document to provide shareholders and potential investors with additional information regarding the expected contribution of the renewable energy assets to the Fund's operating results. EBITDA is not a measure that has standardized meaning prescribed by Canadian Generally Accepted Accounting Principles (GAAP) and is not considered a GAAP measure. Therefore, this measure may not be comparable with similar measures presented by other issuers.FOR FURTHER INFORMATION PLEASE CONTACT: Jennifer VareyEnbridge Income Fund Holdings Inc.Media(888) 992-0997 / (403) 508-6563jennifer.varey@enbridge.comORTeri MajerEnbridge Income Fund Holdings Inc.Investment Community(403) 508-3185teri.majer@enbridge.comwww.enbridgeincomefund.com