Sept. 10 (Bloomberg) -- Capital Power Corp.'s purchase of electricity-generating plants from the City of Edmonton, which led to a C$500 million ($463 million) initial share sale in June, is being challenged by Alberta unions.
The Alberta Federation of Labour and the city's two biggest unions plan to ask a provincial judge tomorrow to block the sale of the plants that had been owned by Epcor Utilities Inc., the city-owned utility, the unions said in a statement today.
"We are arguing that city council had no legal authority to make the decision to privatize Epcor's power generation," Gil McGowan, AFL's president, said in the statement. "If they did not have the legal right to make the decision, the decision cannot be considered valid."
Capital Power, in the biggest IPO in Canada in 18 months, sold 21.8 million shares at C$23, and used the money to buy Epcor's power-generating business. The company produces about 3,300 megawatts from 31 plants in Canada and the U.S.
An Alberta judge on July 3 denied the unions' request to delay the closing of the IPO, ruling that he wasn't satisfied that there was any real merit in the unions' application, according to July 7 statement from Capital Power.
Capital Power and Epcor have denied any wrongdoing.
Bloomberg.com, Thurs Sept 10 2009
Byline: Joe Schneider