Countryside Acquires California Power Generation Assets

London, Ontario — Countryside Power Income Fund announced that it has acquired the holding company of Ripon Cogeneration LLC ("Ripon"), a California-based power generation company, for $95.3 million.

The principal assets acquired consist of two gas-fired cogeneration plants in California powered by General Electric combustion turbines.

• The Ripon Cogeneration Facility, located near San Francisco in Ripon, California, has been in operation since 1988 and has a generation capacity of 51 megawatts. It has a power purchase agreement to 2018 with Pacific Gas & Electric Company, the principal utility operating subsidiary of PG&E Corp, the largest electric utility in California, and also sells steam to a local paper company.

• The San Gabriel Cogeneration Facility, located near Los Angeles in Pomona, California, has been in operation since 1986 and has a generation capacity of 44 megawatts. It has a power purchase agreement to 2016 with Southern California Edison Company, the principal utility operating subsidiary of Edison International, the second-largest electric utility in California, and also sells steam to a local newsprint producer.

The two facilities posted combined revenues of $50 million and EBITDA* of approximately $10.5 million for the period from January 27, 2004 to December 31, 2004.

"This acquisition is an ideal strategic fit for the Fund," said Goran Mornhed, President and Chief Executive Officer of Countryside U.S. Power Inc. "Countryside has acquired quality power generation assets with attractive structure, technology and fuel type. In addition, we expect the acquisition to be accretive to the Fund's cash flow, and by increasing asset diversification, we further reduce the Fund's risk profile."

Edward M. Campana, the Fund's Executive Vice President and Chief Financial Officer, noted that Ripon's well structured commercial and financing arrangements generally insulate the Fund from commodity price and interest rate risk.

"Ripon's electricity is being sold to large, investment-grade utilities and steam to local, and economically important, industrial buyers under long- term contracts," said Campana. "These plants have a long and stable operating performance history with predictable cash flow streams."

In the transaction, Countryside, through an indirect subsidiary, acquired a 100 percent controlling interest in the indirect owner of the two facilities for $35.8 million in cash plus the assumption of non-recourse Ripon debt of $59.5 million for a total of $95.3 million.

The Fund financed the acquisition with its amended revolving credit facility provided by Toronto-Dominion Bank. The Board of Trustees of Countryside Power Income Fund was advised by its independent financial advisor, Cypress Associates, LLC.

SOURCE: Countryside Power Income Fund