Hedge fund Starboard urges Algonquin Power to sell renewable assets (updated)

Algonquin Power & Utilities

06/07/2023 16:07

(Updates with Algonquin's comment in paragraph 7)
       July 6 (Reuters) - Activist hedge fund Starboard Value
on Thursday urged utility firm Algonquin Power & Utilities
 AQN.TO  to sell a majority of its renewable assets to reduce
debt and improve earnings.
    Algonquin is grappling with a $7.5 billion debt burden
following a series of acquisitions in recent years. 
    It said in May it would launch a review of its renewable
energy group, following a push by Corvex Management and other
activist firms for changes.
    "We believe the remaining regulated utility business, once
the unregulated business is sold, should be highly attractive to
public market investors," Starboard said in the letter to
Algonquin on Thursday.
    Starboard is the largest shareholder in Algonquin, with a
7.5% stake.
    The renewable assets that the hedge fund urged to divest
include Algonquin's 42% stake in Atlantica Sustainable
Infrastructure  AY.O , which also launched a strategic review in
February to evaluate its options.
    "While the strategic review process includes assessing a
potential sale or spin-off of the Renewable Energy Group, the
Board is reviewing alternatives with a view to positioning each
business," said Algonquin in an emailed statement.
    Shares of the company fell 1.6% to C$10.94 on Thursday. 

 (Reporting by Sourasis Bose in Bengaluru; Editing by Shounak
Dasgupta and Shinjini Ganguli)
 ((Sourasis.Bose@thomsonreuters.com))