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MMJ Group sees opportunity to invest in Canadian cannabis businesses at attractive valuations – Proactive Investors USA & Canada

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MMJ Group Holdings Ltd (ASX:MMJ) made significant new investments in 2019 including in existing investees WeedMe and Embark Health, whilst also adding new investments in Sequoya and Bespoke.

The company owns a portfolio of investments in the cannabis sector and aims to invest across the full range of emerging cannabis-related sectors.

MMJ’s asset manager, Embark Ventures, sources new investments to diversify the company’s cannabis portfolio whilst providing resources to actively manage its existing investments.

The company believes that the current market and industry sentiment surrounding cannabis companies has created opportunities to invest in listed and unlisted Canadian cannabis businesses at attractive valuations and prices.

In addition to opportunities to invest into new businesses in the global cannabis market in line with MMJ’s investment mandate, MMJ also holds warrants (similar to ‘options’ in Australia) and contractual rights in a number of its existing listed and unlisted investments which provide opportunities for MMJ to make follow-on investments in businesses at a discount to current valuations.

Canadian cannabis industry: challenges

Whilst MMJ continues to hold high-quality Cannabis investments, the Canadian cannabis investment market suffered a material downturn in valuation in 2019.

The industry remains in a period of transition from business establishment to producing operational cashflow. This period of transition is expected to last for the majority of 2020.

Investors are critically examining the capacity of Canadian companies to generate sales and earnings growth during the following 12 to 18 months with expectations that some companies will need to raise cash to continue the rollout of their business plans.

Share purchase plan

MMJ recently launched a share purchase plan (SPP) to raise up to $5 million through the issue of shares priced at 11 cents.

The funds raised will be primarily applied towards investment in existing and new cannabis and hemp businesses, operating expenses and general working capital.

Eligible shareholders will be able to subscribe for up to $30,000 worth of new shares until March 10.

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Inflation: How Should It Affect Your Investment Portfolio? – Forbes

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Inflation is wreaking havoc on budgets across the nation. With the Consumer Price Index (a key indicator of inflation) hitting a 40-year high earlier this year, it’s an economic issue that is affecting every American.

As an investor, the idea of switching up your portfolio selections has likely crossed your mind. You may be tempted to make adjustments to combat this sky-high inflation. But should inflation influence your portfolio selections? Here’s what you should know.

The impact of inflation on your portfolio

Like it or not, it looks like inflation is going to be around for a while. Although the Federal Reserve works to combat inflation with interest rate hikes, it will likely take a bit of time to tame our current inflationary environment.

The CPI cooled slightly as of July 2022. But if inflation stands at over 8%, everyone will continue to feel the pinch. It’s unavoidable that inflation will have an impact on your portfolio, but it may affect different assets in different ways. Here’s how inflation will impact stocks and bonds.

Stocks

Stocks are considered to be more volatile investments than bonds. If you’ve been an investor for any amount of time, you’ve likely noticed how quickly stock prices can rise and fall. Over the last two years, it’s been an especially bumpy ride for investors with stock-heavy portfolios.

Although stocks are generally in a better position to keep up with inflation than bonds, not all stocks are able to offset sky-high inflation. For example, stocks in the energy sector may be able to keep up with inflation better than stocks in the tech sector. That’s because energy costs are tied directly to inflation. Consumers might be able to skip out on the latest tech gadgets, but they cannot readily avoid paying for energy.

Bonds

Bonds are often considered a more stable investment opportunity than stocks. The lower risk associated with bonds makes them more stable, but the lack of risk also leads to lower returns. And when inflation is running rampant, bonds often cannot keep up.

One problem with inflation for bond investors is that because bonds are debt-based, they’ve usually locked in a specific interest rate. So when the Federal Reserve starts to raise interest rates in an effort to combat inflation, the real yield drops for existing bonds.

However, there is an exception to this rule. Treasury Inflation-Protected Securities are bonds that are specifically designed to keep pace with inflation. After you purchase a TIPS, the principal will increase with inflation and decrease with deflation. The changes are made based on the changes to the CPI, and interest is paid out twice a year at a fixed rate.

Alternative investments

Stocks and bonds aren’t the only investment opportunities out there. Many investors have a portion of their portfolios allocated to other types of assets.

Investments in real estate through income-producing properties or real estate investment trusts (REITs) give your portfolio exposure to a different area of the economy. In general, real estate is thought to keep up with inflation, but the individual factors of a local market could impact that trend.

Other investments that generally keep pace with inflation include precious metals and some commodities, such as crude oil, natural gas, grains, and other agricultural products. Many investors choose to add gold or silver to their portfolios as a hedge against inflation.

The downside to some of these alternative investments is that you might need more knowledge to get started. You might even have to make a commitment to owning and protecting a physical asset, as with an individual income-producing property.

Consider other markets

Inflation doesn’t always impact markets around the world in the same way at the same time.

Although the U.S. market is experiencing severe inflation, not every country has the same problem (or at least not to the same extent). Taking an opportunity to invest in an emerging market comes with risk, but some foreign markets might give you a better chance of keeping up with inflation.

Should inflation influence your portfolio?

It’s clear that inflation will have a negative impact on most investment portfolios.

The inflationary environment makes it difficult for assets to produce a positive return. After all, when inflation is over 8%, you’ll need investment returns of at least 8% just to keep pace. That’s easier said than done.

It’s best to build out a diversified portfolio along the way to minimize the impact of inflation on your returns. Here are some best practices to consider as you build a portfolio designed to keep pace with inflation:

Define Your Goals

Inflation is a pervasive economic influence that eats away at purchasing power. When inflation is around, it impacts everyone’s funds. But you’ll have to decide for yourself what kind of course you want to chart with your investments.

Everyone wants to avoid the impact of inflation. However, that’s not the only factor to consider when building a portfolio. You’ll also want to determine what level of risk you are comfortable with. It’s okay to take on more or less risk based on your preferences.

Diversify

Instead of jumping into a ton of changes, start by assessing where your portfolio currently stands. If you aren’t already diversified, then it might be time to make some changes.

The right split between stocks and bonds is the first number to consider. As an investor, you’ll have to decide which ratio is right for you. Generally, investors with a lower risk tolerance beef up their portfolios with more bonds, and investors with a higher risk tolerance are comfortable with more volatile stocks in their portfolios.

But when it comes to intense inflation, having too much of your portfolio in bonds could actually backfire. Ultimately, you’ll have to weigh the volatility risks associated with the stock market against the draining power of inflation.

In the case of inflation, you might decide to favor stocks a bit more. Or, if you’re buying bonds, TIPS and their inflationary protections might deserve a place in your portfolio.

What sectors should you watch?

When it comes to stocks, some will perform better than others in an inflationary environment. As an investor, it’s important to keep an eye on a few key sectors. Be sure to look into Q.ai investment kits designed around specific investment areas, like energy, inflation-resistant, or growth stocks.

Energy

The energy sector is tied closely to the Consumer Price Index. The price of fuel, gasoline, electricity, and natural gas as a utility all play directly into the CPI. Since the CPI is a key measurement of inflation, the correlation is clear.

When energy prices rise or fall, the CPI is impacted. With that, the energy sector is poised to do well when the economy is facing inflation pressures. That’s because consumers generally can’t skip purchasing the energy needed to function in society. For example, even if the price of gasoline is high, many people still purchase their regular amount because they simply need to commute.

Staples

Core consumer staples, like groceries, tend to get along just fine when inflation is around. The reality is that shoppers still need to pick up their weekly supply of bread, eggs, and milk. Even if the prices are higher, many families are forced to spend more on basic items found on grocery shelves across the country.

Because of this, investing in staple stocks is a good way to hedge your bets against inflation.

Growth Stocks

Growth stocks typically have minimal cash flow. When times are good and inflation is manageable, growth stocks can soar. But when the economy is facing hard times, consumers are forced to make changes to their spending just to make ends meet. With those budget cuts, it gets more difficult for companies without an essential service offering to survive.

Growth-based stocks will take a harder-than-average inflationary hit, so keep this in mind when setting up your investment portfolio.

Bottom Line

Some investments are better suited to tolerate an inflationary environment than others. As the U.S. economy settles into inflationary times, it’s important to keep a careful watch on your portfolio. But it’s usually not the right time to enact major changes unless your portfolio isn’t diversified enough to weather the coming storm.

Download Q.ai today for access to AI-powered investment strategies. When you deposit $100, we’ll add an additional $50 to your account.

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GTA Commercial Real Estate Investment Remains Strong in Q2 – Storeys

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Written By
Laura Hanrahan

Commercial real estate investment in the Greater Toronto Area (GTA) saw another strong quarter, continuing the high-performing streak that began in the second half of last year.

According to Avison Young’s most recent Commercial Real Estate Investment Review, buyers’ willingness to invest in capital during the second quarter of the year “is a testament to their confidence in the market’s stability and prospects for the future amid the constantly shifting post-pandemic landscape.”

Industrial trades led the pack with $2.6B in investment activity — a full $1B more than was seen during the first quarter of the year and $1.2B more than the same time one year prior. This accounted for 36% of overall GTA commercial real estate investment volume. The GTA is well on track to obliterate pre-pandemic industrial investment volumes, with more than $4.1B in trades taking place in the first half of the year. In 2019, the full-year total was $4.3B.

Office and retail sales, on the other hand, were both down quarter over quarter. The report notes that during the previous quarter, office sales were boosted by the sale of Toronto’s Royal Bank Plaza, which was picked up by Zara founder Amancio Ortega for $1.2B. On an annual basis, however, the $1.1B in office investment seen during the second quarter of the year is up substantially from the $349M seen during the same time in 2021.

“With almost $3B in assets changing hands through the first half of 2022, the sector has already eclipsed the annual results recorded in 2020 and 2021 — and the all-time high of $4.3B set in 2019 may be within reach by year-end,” the report says.

Retail was the only sector to fall short of $1B in trades during Q2, and was not only down quarter over quarter, but year over year as well with $696M worth of assets sold. This marks a 30% decline from Q1 investment.

“At this pace as of mid-year, the retail sector’s full- year investment total may fall short of the $3.6-B result achieved in 2021,” the report reads. “Despite being the second-most active asset type by number of trades (trailing only the industrial sector), large deals were mostly absent this quarter, and the average transaction volume of $3.7M was the smallest among all asset types by a wide margin.”

Industrial commercial investment land and multi-residential properties were both up slightly on a quarterly and annual basis. ICI land hopped up 5% from the previous quarter to $1.7B, bringing the yearly total to $3.3B which exceeds every full-year total prior to 2021’s record-breaking $5.8B. Of note, the second quarter numbers were propped up by the $480M sale of 194 acres of agricultural land in Caledon to logistics operator Prologis.

Multi-residential sales grew 10% quarter over quarter to $1B, bringing the 2022 total to $1.9B. With that in mind, the report notes that the GTA is on track to meet or exceed the $3.8B investment high set in 2019. Portfolio sales accounted for 65% of the sector’s total dollar volume during Q2, with four of the five largest transactions being portfolios.

Written By
Laura Hanrahan

Laura has covered real estate in Toronto, New York City, Miami, and Los Angeles. Before coming to STOREYS as a staff writer, she worked as the Toronto Urbanized Editor for Daily Hive.

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OMERS investments steady in a difficult market environment – Financial Post

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TORONTO, Aug. 18, 2022 (GLOBE NEWSWIRE) — OMERS generated a net investment return of -0.4%, or a loss of $0.5 billion, during the six-month period from January 1 to June 30, 2022. Over the twelve months ended June 30, 2022, the Plan earned a net investment return of 6.0%, or a gain of $6.7 billion, after reporting a net investment return of 15.7% or $16.4 billion for the 2021 calendar year. Net assets as at June 30, 2022 were $119.5 billion.

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“As everyone has witnessed, the first half of the year was extraordinarily difficult for investors in an environment characterized by ongoing geopolitical challenges, supply chain issues, recessionary threats, and soaring increases to both inflation and interest rates – more rapid than we have seen in decades. These influences combined to create acute stress in the global economic environment, pushing the returns for leading global investment market indices to decline well into the double digits,” said Blake Hutcheson, OMERS President and CEO. “Against this backdrop, our investment teams and strategy have been extremely effective in protecting the value of our members’ portfolio, by any objective measure.”

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“Our significant allocations to private investments, the strategic decisions to favour quality over growth stocks, and short-term credit over long-term bonds, protected OMERS from the worst six month period of market losses incurred by investors in more than 50 years,” said Jonathan Simmons, OMERS Chief Financial and Strategy Officer. “Infrastructure, real estate, and private equity all generated positive investment returns that largely offset the negative performance of public equities and credit investments.”

“OMERS is a long-term investor and over the last 10 years our active investment and asset management strategies have produced $62 billion in value for our members and a 7.5% annualized return.  As we look to the future, we remain well-positioned with a portfolio of high-quality investments and ample liquidity to pursue the right growth opportunities for our Plan,” said Mr. Hutcheson. “Across OMERS, our entire team is proud to work in service of over half a million hard-working OMERS members. We remain relentlessly focused on delivering to them a sustainable, affordable and meaningful plan for the generations to come.”

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OMERS remains highly rated by four credit rating agencies, including two ‘AAA’ ratings.

OMERS is a jointly sponsored, defined benefit pension plan, with 1,000 participating employers ranging from large cities to local agencies, and over half a million active, deferred and retired members. Our members include union and non-union employees of municipalities, school boards, local boards, transit systems, electrical utilities, emergency services and children’s aid societies across Ontario. OMERS teams work in Toronto, London, New York, Amsterdam, Luxembourg, Singapore, Sydney and other major cities across North America and Europe – serving members and employers, and originating and managing a diversified portfolio of high-quality investments in public markets, private equity, infrastructure and real estate.

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-30-

CONTACT
Neil Hrab
nhrab@omers.com
+1 416 369 2418

Net Assets $ Billions

Net Assets $ Billions

Diversified by Asset Class and Geography

OMERS invests in high-quality assets that are well-diversified by geography and asset type.

OMERS 2022 Mid-year Press Release Image 2

On March 1, 2022, OMERS updated asset class definitions in connection with our updated Statement of Investment Policies & Procedures; the asset mix above reflects these updated definitions.

OMERS 2022 Mid-year Press Release Image 3

Asset Class Investment Performance

  Net Returns
  Six months ended June 30, 2022
Bonds -2.5%
Credit -1.8%
Public Equity -13.2%
Private Equity 7.7%
Infrastructure 4.8%
Real Estate 9.9%
Total Plan -0.4%

Investment Performance highlights

Over the first six months, ended June 30, 2022:

  • Our bond and credit portfolios generated narrow losses despite a sharp rise in bond yields and credit spreads. The short-term duration of our portfolio sheltered it from more significant declines following the rise in rates.
  • Our public equities portfolio was heavily impacted by the widespread and significant drawdowns in global stock markets. Our strategic focus on high-quality investments; exposure to Canadian equities; and lower exposure to growth stocks, including consumer discretionary and information technology; all helped to dampen the impact of market losses.
  • Our private equity return was driven by strong operational performance as businesses in our portfolio grew their earnings organically and through acquisitions.
  • Our infrastructure investments continued their long track record of steady performance with stable operating income, and higher valuations from accretive refinancing and transaction activity.
  • Our real estate assets outperformed expectations, as a result of higher valuations and development profits from our North American industrial portfolio, and operating income.
  • Our portfolio’s investment returns have also broadly benefited from locking in fixed-rate, fixed-term financing in prior years, when borrowing rates were lower than in the current environment.

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Recourse Debt

We continue to use debt prudently to enhance our investment returns. At June 30, 2022, we had $11.7 billion of recourse debt outstanding, equating to a recourse debt ratio of 8.7% of net assets, up from 7.8% at December 31, 2021. This change was driven by the issuance of our first sustainable bonds, for 10- and 30-year terms, totaling US$1.1 billion.

In addition to this low leverage, we continue to maintain ample liquidity. At June 30, 2022, OMERS had $25.4 billion of liquid assets to pay pension benefits, to fund investment opportunities, to satisfy potential collateral demands related to our use of derivatives, and to fund expenses.

Leverage

Long-Term Issuer Credit Ratings

AAA
DBRS
AAA
Fitch
Aa1
Moody’s
AA+
S&P

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This Investment Update presents certain non-GAAP measures. These measures are calculated on the same basis as those calculated and presented in our 2021 Annual Report. This Investment Update and the Condensed Interim Consolidated Financial Statements (the “Interim Financial Statements”) are unaudited. OMERS Administration Corporation’s financial performance set out in this Investment Update is only for the period ended June 30, 2022. Past performance may not indicate future performance because a broad range of uncertainties (including without limitation the future course of the global pandemic) could have an impact on the performance of various asset classes. The financial information included in this Investment Update should be read in conjunction with the Interim Financial Statements.

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Transaction Overview

INVESTING FOR TOMORROW
To create value for our members over the long term, OMERS remains focused on strengthening our portfolio and deploying capital towards our target asset mix. We remain disciplined as we invest in diverse, high-quality assets that meet the Plan’s risk and return requirements.

HEALTHCARE AND LIFE SCIENCES
We believe that investments centred around life sciences and health care make a meaningful difference today, as they support and advance innovative solutions for tomorrow’s medical needs. In this space, we:

  • Announced a series of life sciences opportunities, including: a partnership with Novaxia to invest in and develop life sciences properties in France; our selection as the preferred development partner of Snowsfields Quarter in central London, UK, a life sciences hub with world-class lab facilities in a prime health innovation cluster; a strategic partnership for the Navy Yard in Philadelphia (US) which will, over time, own and develop up to 3 million square feet of life science properties; and the acquisition of a nine-asset, 13-building life sciences portfolio in San Diego’s Sorrento Mesa and Sorrento Valley (US).
  • Took a minority stake in US-based Medical Knowledge Group, a leading commercialization services platform serving pharmaceutical and biotechnology companies.
  • Announced a funding round to help Aledade continue scaling its practice management solutions, serving more than 11,000 physicians in 36 US states and the District of Columbia.
  • Invested in Birdie, a UK-based home healthcare technology that aims to reinvent care at home and radically improve the lives of millions of older adults.

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In the weeks since June 30, 2022, we:

  • Announced an investment in Ultragenyx Pharmaceutical Inc., which will earn royalties from the future sales of Crysvita®, a drug that is improving the lives of pediatric and adult patients with two rare diseases.
  • Completed the conversion of the Boren Labs office building to a fully dedicated life sciences facility in downtown Seattle, Washington (US).
  • Announced our investment in Caraway, a hybrid 24-hour healthcare platform focused on women’s health.

LOGISTICS AND TRANSPORTATION

We expect the global growth of e-commerce and demand for expedited supply chains to result in strong long-term demand for logistics and transportation assets. In the first half of 2022, we:

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  • Partnered to acquire Direct ChassisLink, Inc., one of the largest chassis lessors in the US, with over 151,000 marine and 100,000 domestic chassis in its fleet.
  • Announced that existing portfolio investment IndInfravit, which owns a series of toll highways in India, would add additional roads across four states in the country.
  • Grew our investment in global logistics, including the purchase of a portfolio of seven high quality UK logistics assets.

SUSTAINABLE INVESTING AND RENEWABLES
We have made several investments in assets that address key sustainability issues and which reflect the growing investor confidence in renewables, while supporting our commitment to achieve our goal of net-zero greenhouse gas emissions by 2050. In the first six months of 2022, these include:

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  • A partnership to purchase Groendus, a Dutch energy transition firm active in rooftop solar, metering and energy services.
  • Joining other institutional investors in funding Group14 Technologies, an innovative electric battery materials manufacturer.
  • Leading a funding round for 99 Counties, a US-based platform that supports regenerative farming that brings sustainable products to market and offers healthy, nutrient-dense foods to consumers.

In the weeks since June 30, 2022, we:

  • Announced a minority investment in NovaSource Power Services, the world’s largest independent solar operations and maintenance provider for utility-scale, commercial, industrial, and residential solar assets.

TECH-FORWARD INNOVATION

We are investing in businesses doing interesting work to innovate, harnessing the power of technology to do so. From January to June of this year, we:

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  • Partnered to provide a term loan to AGP, a highly specialized glass manufacturer with advanced technology for autonomous vehicles and producer of specialty automotive glazing components, to support its global expansion plans.
  • Made a convertible preferred investment in Precisely, a data management firm, providing accuracy, consistency, and context in data for customers in more than 100 countries.
  • Made a minority investment in US-based real-time analytics company Imply.
  • Led the funding rounds in exciting businesses including Moves, an all-in-one banking app for gig workers; and Next Matter, an automation platform that centralizes and automates operational processes.

In the weeks since June 30, 2022, we:

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  • Acquired Bionic a UK-based tech-enabled platform that matches SME business owners with energy, insurance, connectivity, telecoms and commercial finance solutions.

COMMUNICATIONS INFRASTRUCTURE AND BUSINESS SERVICES
We invest in companies that deliver services and support to communities, individuals and businesses, providing communications infrastructure that keeps people connected, and helping to ensure that utilities and related services are available when needed.

  • In the first months of 2022, we announced agreements to purchase TPG Telecom’s mobile towers and rooftop portfolio, located across Australia; and Stilmark, an independent developer, owner and operator of Australian mobile tower assets.

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In the weeks since June 30, 2022, we:

  • Acquired Network Plus, a leading utility and infrastructure repair and maintenance service provider in the UK, that maintains and delivers essential services – including water, electricity, gas and telecoms – to homes, businesses, and industry; and announced the acquisition of Pueblo Mechanical & Controls, a leading mechanical services company providing HVAC and plumbing installation, retrofit and repair services to commercial clients, based in Arizona (US).

DEPLOYING INTO PRIVATE CREDIT
For a number of years, we have been steadily building out our private credit investing expertise, platform and relationships. During the first six months of 2022, we deployed strategically into these private credit assets, pleased to see that the risk-adjusted returns on high-quality, short-term loans have made this space even more compelling.

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REALIZATIONS
We rotate capital out of assets with the same level of discipline with which we invest. At the half year mark, our total realizations exceed our acquisitions so far in the year. This activity generated capital, which we plan to deploy into future investment opportunities.

During the first six months of 2022 we agreed to sell interests in several investments, including:

  • Straight Crossing Development Inc., which operates the Confederation Bridge, a Canadian landmark connecting the provinces of New Brunswick and Prince Edward Island;
  • GNL Quintero S.A., a liquid natural gas terminal in Chile;
  • Forefront Dermatology, a consolidated dermatology clinic business;
  • A 50% interest in the Sony Centre, an office-led mixed-use landmark property in Berlin; and
  • Royal Bank Plaza in Toronto’s financial district and St. John’s Terminal in Manhattan; each representing one of the largest office transactions of the year in their respective markets.

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In the weeks since June 30, 2022:

  • We announced an agreement to sell the Plan’s interest in the holding company that controls the Michigan-based Midland Cogeneration Venture (MCV), a gas-fired cogeneration facility.

Charts accompanying this announcement are available at:

https://www.globenewswire.com/NewsRoom/AttachmentNg/ca14a8ed-d79b-4c94-9f52-3d6aec249d74

https://www.globenewswire.com/NewsRoom/AttachmentNg/b96d4c60-8d1f-4bff-9f81-98d19ea555d5

https://www.globenewswire.com/NewsRoom/AttachmentNg/e833b11a-5f7f-41d5-a292-21430e5f0f53

https://www.globenewswire.com/NewsRoom/AttachmentNg/7fb1af0a-1c28-4862-9b83-7a4864b7b9e0

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