Emera Inc on Tuesday announced that its wholly owned subsidiary Emera Caribbean Limited has agreed to sell its 19.1 per cent interest in LUCELEC to Barbados-based Light & Power Holdings Limited (LPH) for US$25.8 million.
LPH is also an Emera subsidiary.
LUCELEC, or St Lucia Electricity Services Limited, holds the exclusive licence to generate, transmit and distribute electricity on St Lucia to year 2045.
"This acquisition will allow for greater cooperation between two leading electric utilities in the Eastern Caribbean," said LPH Managing Director Peter Williams.
"LPH having an equity stake in LUCELEC will allow for a sharing of skills and increased efficiencies that we believe will result in benefits to customers in both countries," he said.
LPH is an investment company and the owner of Barbados Light & Power Company Limited, a licensed supplier of electricity energy in Barbados.
Emera, which is based in Canada but owns assets in the Caribbean and United States, also holds a majority 80 per cent stake in LPH.
LUCELEC services a customer base of 60,000.
LUCELEC Managing Director Trevor Louisy said the Emera/LPH transaction "marks the start of a new era in the utility sector in the region".
"Clearly, the region has the financial and technical capacity to make such investments, which was unheard of in the past, and is indicative of a maturing of the sector. It also suggests that LUCELEC has been, and continues to be, a sound investment option," Louisy said.
The terms of the acquisition allows for a potential US$4 million increase in the sale price within 30 months of the deal's expected year-end closing - which would increase the value of the deal to US$29.8 million.
"Any adjustment would be triggered by either an additional public offering by LUCELEC or a change in its allowed return on equity as a result of a change in its regulatory framework," said Emera.