Aug 9 Reuters Canada39;s Algonquin Power Utilities said on Friday it would sell its renewable energy business, excluding the hydropower operations, to a unit of U.S.based LS Power for up to 2.5 billion.

Last August, the company said it was considering a sale of the renewable energy unit under pressure from hedge fund Starboard Value, its biggest shareholder, and other activist firms to reduce debt and boost earnings.

This is all going to debt repayment and of course with that strong balance sheet we will have some flexibility to make different choices from there. But, the primary focus is really to be more selfsustaining, a senior Algonquin executive said on a call to discuss the deal.

Algonquin had a longterm debt of about 8.3 billion at the end of June, following a series of acquisitions in recent years.

The company39;s shares were last down about 11 in morning trading.

TD Cowen analysts said though the deal valuation was consistent with investor expectations, the market reaction was likely due to the dividend cut and plans to restrain capex at regulated utilities.

Algonquin, which reported secondquarter results on Friday, said it would reduce its regulated capital expenditures for 2025 and declared a quarterly dividend of 6.5 cents per share, compared with the 10.85 cents announced in the prior quarter.

The renewables business largely consists of wind and solar assets located throughout the U.S. and Canada. It includes 44 operating assets with more than 3,000…