07:36 AM EDT, 05/28/2024 (MT Newswires) -- Algonquin Power & Utilities ( AQNB ) said on Tuesday that it backs Energy Capital Partners' proposed US$2.56 billion acquisition of Atlantica Sustainable Infrastructure.

Algonquin subsidiary Liberty (AY Holdings) B.V. holds a 42% stake in Atlantica, which the deal values at US$1.08 billion. Energy Capital Partners will pay US$22.00 per share in cash for Atlantica.

Algonquin expects to use the proceeds to help reduce debt and recapitalize its balance sheet.

"The exit of our financial investment in Atlantica is another step forward in our strategic transition as we simplify our structure and focus on becoming a pure-play regulated utility," Algonquin CEO Chris Huskilson said.

Atlantica expects the transaction to close in the fourth quarter or early next year.

Algonquin's share price jumped 3.1% at last look to US$6.74 in U.S. pre-market trading.