July 10 (Bloomberg) -- Western Wind Energy Corp., a Canadian renewable-energy developer with projects in the U.S. West, fell the most in more than eight months after receiving only a portion of a grant expected from the U.S. Treasury Department for a wind farm in California.
The company dropped 9.3 percent to C$1.27 at the close in Toronto, the most since October 26.
Western Wind was awarded a $78.3 million U.S. grant, according to a statement today. The Vancouver-based company had applied for $90.5 million under the Treasury Department’s 1603 cash grant program and plans to appeal to receive the full amount.
The $12.2 million shortfall may make it harder for Western Wind to repay short-term loans that are due soon for its 120-megawatt Windstar project in Tehachapi, California, and were expected to be repaid with the Treasury Department grant, John McIlveen, an analyst at Jacob Securities Inc., said in an interview today. “It puts pressure on them to refinance,” said McIlveen, who rates the shares a buy.
Western Wind will be able to meet its obligations from internal operations, Lawrence Casse, a company spokesman, said in an interview. “Obviously it would be better to have it than not to have it, but we do think that we’re going to get it.”
The Treasury Department provided only a portion of the grant because it reclassified the amount that may be sought as “developer fees,” according to the statement.
Western Wind expects to receive the full grant. “The government has denied people their full amount and people have gone back and been successful in increasing the amount,” Chief Executive Officer Jeffrey Ciachurski said in a phone interview.
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