TC Energy open to exceeding $3 billion asset divestiture target this year: says CEO
TC Energy Corp. is open to selling off more than its previously announced target of $3 billion in assets this year, the company said Friday, and is currently engaging with multiple interested buyers for what will likely be two to four separate transactions.
CEO Francois Poirier said the Calgary-based pipeline operator has several divestiture processes underway and hopes to be able to make at least one asset sale announcement in the first half of the year.
“We’ve got many conversations going on, and not only is there competition within processes, but there’s competition between processes,” Poirier told analysts while discussing TC Energy’s fourth-quarter earnings.
“So to the extent we could see some compelling valuations, we would be open to considering exceeding the $3 billion target.”
The $3B, which Poirier said the company is “steadfast” on achieving in 2024, comes on the heels of last fall’s announcement by TC Energy that it had completed the sale of a 40 per cent stake in its Columbia Gas and Columbia Gulf systems to New York-based Global Infrastructure Partners for $5.3 billion.
While the deals the company hopes to strike in 2024 will not be as large, Poirier said they have generated significant interest from the market.
“Those smaller transaction sizes tend to widen the buyer universe because more people can write those cheque sizes,” Poirier said.
“So we have seen good interest in the different processes that we have underway.”
TC Energy has been seeking to sell assets in order to pay off debt. The company has been under significant scrutiny from investors and credit rating agencies for its heavy debt load as well as for the spiralling costs of Coastal GasLink, the 670-km pipeline project it completed last fall.
Coastal GasLink - which will transport natural gas from Western Canada to the Shell-led LNG Canada processing and export facility currently being built in Kitimat was one of the largest energy infrastructure projects in recent Canadian history and its successful completion is a significant accomplishment for TC Energy.