News Release

Capstone Infrastructure Corporation Sells 20% Interest in Bristol Water to ITOCHU Corporation


  • Delivers attractive return on investment while enabling capital to be redeployed toward debt reduction and improving balance sheet flexibility
  • Preserves controlling interest for Capstone in an attractive regulated business with stable cash flow and a strong growth profile
  • Adds a new partner with extensive global experience and relationships in the infrastructure sector

TORONTO, ONTARIO (May 10, 2012) – Capstone Infrastructure Corporation (TSX: CSE; CSE.DB.A; CSE.PR.A – the “Corporation”) today announced it has sold an interest representing 20% of Bristol Water, a regulated water utility in the United Kingdom, to ITOCHU Corporation (“ITOCHU”), a publicly traded company headquartered in Tokyo, Japan, for net proceeds of approximately $68 million.

“This initiative represents a compelling means relative to other alternatives for Capstone to significantly reduce its debt maturing in 2012 while maximizing future cash flow and retaining a sizable interest in a stable, regulated business with a significant growth profile that will enhance long-term value for our shareholders.  At the same time, we have realized an attractive return on our investment, demonstrating the solid fundamentals of the UK water sector and of Bristol Water in particular,” said Michael Bernstein, President and Chief Executive Officer.  “With ITOCHU, we are also gaining a new partner with diverse international relationships and a broad scope of businesses, which fits well with our focus on building a diversified portfolio of core infrastructure businesses globally. The ITOCHU team offers considerable infrastructure development and investment expertise and we are pleased to welcome them to Bristol Water.”

As a result of the sale to ITOCHU, the Corporation now holds a 50% ownership interest in Bristol Water, thereby retaining its controlling interest.  The remaining 30% ownership interest in Bristol Water continues to be held by SUEZ ENVIRONNEMENT through its subsidiary, AGBAR (Sociedad General de Aguas de Barcelona). Bristol Water’s financial results will continue to be consolidated into those of the Corporation.

The Corporation will use the proceeds of the sale to fully repay the $29 million balance outstanding on its senior credit facility and a portion of the $119 million balance outstanding on the CPC-Cardinal credit facility, which matures on June 29, 2012. The Corporation expects to address the remaining approximately $80 million of its debt maturing in 2012 through a recapitalization of its hydro power facilities and the establishment of a new corporate facility with its existing lenders.  Both of these financing initiatives are at a significantly advanced stage and are expected to be completed in May.

Mr. Bernstein added, “Bristol Water remains a significant long-term investment for Capstone as we work to shift the mix, duration and cash flow characteristics of our portfolio.  While we evaluated a number of alternatives to meet our near-term financing requirements, this initiative creates new balance sheet flexibility to support our growth strategy.  Additionally, this transaction clearly validates the value of our initial investment in Bristol Water and underlines the appeal of the UK water sector to infrastructure investors globally.”

In addition, the Corporation and ITOCHU have entered into a memorandum of understanding to explore joint infrastructure investment opportunities including contracted power generation, utilities and public-private partnerships in countries that are member states of the Organization for Economic Cooperation and Development, including North America, Western Europe and Scandinavia, and Australia and New Zealand.

ITOCHU was founded in 1858 and currently has approximately 130 offices in 67 countries.  ITOCHU’s global infrastructure holdings include, among others: development projects or investments in renewable energy and power generation in North America, Europe, the Middle East and Asia, totaling net generation capacity of approximately 2,700 megawatts (“MW”); transportation assets; and water and desalination facilities. ITOCHU’s engineering, procurement and construction businesses have supplied 28,000 MW of power projects globally, including in Canada.  ITOCHU is also engaged in domestic trading; import/export trading of various products such as textile, information and communications technology, machinery, energy, metals, minerals, chemicals, forest products, general merchandise and food; realty; finance; insurance; logistics services; and business investment in Japan and internationally. 

Notice to Readers

Certain of the statements contained within this document are forward-looking and reflect management’s expectations regarding the future growth, results of operations, performance and business of Capstone Infrastructure Corporation (the “Corporation”) based on information currently available to the Corporation. Forward-looking statements are provided for the purpose of presenting information about management’s current expectations and plans relating to the future and readers are cautioned that such statements  may not be appropriate for other purposes. These statements use forward-looking words, such as “anticipate”, “continue”, “could”, “expect”, “may”, “will”, “estimate”, “plan”, “believe” or other similar wordsThese statements are subject to known and unknown risks and uncertainties that may cause actual results or events to differ materially from those expressed or implied by such statements and, accordingly, should not be read as guarantees of future performance or results. The forward-looking statements within this document are based on information currently available and what the Corporation currently believes are reasonable assumptions, including the material assumptions set out in the management’s discussion and analysis of the results of operations and the financial condition of the Corporation (“MD&A”) for the year ended December 31, 2011 under the heading “Results of Operations”, as updated in subsequently filed interim MD&A of the Corporation (such documents are available under the Corporation’s profile on

Other material factors or assumptions that were applied in formulating the forward-looking statements contained herein include or relate to the following: that the business and economic conditions affecting the Corporation’s operations will continue substantially in their current state, including, with respect to industry conditions, general levels of economic activity, regulations, weather, taxes and interest rates; a TransCanada Pipelines (“TCPL”) gas transportation toll of approximately $2.24 per gigajoule in 2012; the level of gas mitigation revenue earned by the Cardinal facility; that there will be no unplanned material changes to the Corporation’s facilities, equipment or contractual arrangements; no unforeseen changes in the legislative, regulatory and operating framework for the Corporation’s businesses; no delays in obtaining required Approvals; no unforeseen changes in rate orders or rate structures for the Corporation’s power infrastructure facilities, Swedish district heating business (“Värmevärden”) and UK water utility (“Bristol Water”); the sale by the Corporation of a minority interest in Bristol Water on May 10, 2012; no unfavourable changes in environmental regulation and no significant event occurring outside the ordinary course of business; the refinancing of the Corporation’s Capstone Power Corporation-Cardinal Power credit facility and project financing of the Corporation’s hydro power facilities (that potentially include amortization profiles); that there will be no further amendments by the Ontario government to the regulations governing the mechanism for calculating the Global Adjustment (which affects the calculation of the price escalators under each power purchase agreement (a “PPA”) for the Cardinal facility and the hydro power facilities located in Ontario); the accounting treatment for Bristol Water’s business under International Financial Reporting Standards, particularly with respect to accounting for maintenance capital expenditures; the amount and timing of capital expenditures by Bristol Water; the Swedish Krona to Canadian dollar exchange rate; the UK pound sterling to Canadian dollar exchange rate; and that Bristol Water will operate and perform in a manner consistent with the regulatory assumptions underlying its current asset management plan, including, among others: real and inflationary increases in Bristol Water’s revenue, Bristol Water’s expenses increasing in line with inflation, and capital investment, leakage, customer service standards and asset serviceability targets being achieved.

Although the Corporation believes that it has a reasonable basis for the expectations reflected in these forward-looking statements , actual results may differ from those suggested by the forward-looking statements for various reasons, including risks related to: variability and payments of dividends on the Corporation’s common shares, which are not guaranteed; volatile market price for the Corporation’s securities; availability of debt and equity financing; default under credit agreements; credit risk, prior ranking indebtedness and absence of covenant protection for holders of the Corporation’s convertible debentures; dependence on subsidiaries and investees; acquisitions; geographic concentration and non-diversification; foreign exchange risk; reliance on key personnel; insurance; shareholder dilution; derivatives risks; changes in legislation and administrative policy; competition; private companies and illiquid securities; operational performance; PPAs; fuel costs and supply; contract performance; Amherstburg Solar Park technology risk; land tenure and related rights; environmental, health and safety regime; regulatory regime and permits; force majeure; influence of the UK water regulator (“Ofwat”) price determinations; failure of Bristol Water to deliver capital investment programs; failure of Bristol Water to deliver water leakage target; Ofwat’s introduction of the Service Incentive Mechanism and the serviceability assessment; economic environment, inflation and capital market conditions; pension plan obligations; operational risks; competition; default under Bristol Water’s artesian loans, bonds, debentures and credit facility; seasonality and climate change; labour relations; special administration; general risks inherent in the district heating sector; industrial and residential contracts; default under Värmevärden Bonds; and minority interest.  Further information regarding these risk factors is contained in the Corporation’s Annual Information Form (which is available under the Corporation’s profile on

The assumptions, risks and uncertainties described above are not exhaustive and other events and risk factors could cause actual results to differ materially from the results and events discussed in the forward-looking statements . The forward-looking statements within this document reflect current expectations of the Corporation as at the date of this document and speak only as at the date of this document. Except as may be required by applicable law, the Corporation does not undertake any obligation to publicly update or revise any forward-looking statements.

About Capstone Infrastructure Corporation Capstone Infrastructure Corporation’s mission is to build and responsibly manage a high quality portfolio of infrastructure businesses in Canada and internationally in order to deliver a superior total return to shareholders by providing reliable income and capital appreciation.  The Corporation’s portfolio currently includes investments in gas cogeneration, wind, hydro, biomass and solar power generating facilities, representing approximately 370 MW of installed capacity, a 33.3% interest in a district heating business in Sweden, and a 50% interest in a regulated water utility in the United Kingdom.  Please visit for more information.

For further information, please contact:
Aaron Boles
Vice President, Communications and Investor Relations
T: 416-649-1325