08/06/2013 07:02 EDT | Updated 10/06/2013 05:12 EDT

Maxim Power to sell U.S. electricity generation arm in US$112-million deal

CALGARY - Maxim Power Corp. (TSX:MXG) has agreed to sell a U.S. subsidiary for US$112 million including the assumption of US$22 million of debt.

Maxim Power (USA) Inc. operates five natural gas-fired electric generation facilities in the United States.

The sale is part of a previously announced strategic review by Calgary-based Maxim Power, which has been operating power plans in Canada, the United States and France.

Maxim Power USA is being sold to Patriot Power Holdings, an affiliate of Rockland Capital.

Excluding the assumed debt, Calgary-based Maxim Power will receive US$90 million in proceeds from the deal, which is expected to close in the fourth quarter.

Maxim says it will use money from the deal to repay bank operating lines and cash collateralize letters of credit and still have significant cash for strategic corporate purposes.