Trans Mountain Pipeline System and Expansion Project to be sold for $4.5 billion
Deal ensures critical project benefiting all Canadians will proceed The .inder 0organ Canada Limited (.0L) board today (0ay ) announced that the *overnment of Canada has agreed to purchase the Trans 0ountain 3ipeline system and the expansion project (T0E3) for C . billion, and to work with the board to seek a third party buyer for the Trans 0ountain 3ipeline system and T0E3 through -uly ,
. $s part of the agreement, the *overnment of Canada has agreed to fund the resumption of T0E3 planning and construction work by guaranteeing T0E3’s expenditures under a separate )ederal *overnment recourse credit facility until the transaction closes. The parties expect to close the transaction in the late in the third quarter or early in the fourth quarter of , subject to .0L shareholder and applicable regulatory approvals. “We are pleased to reach agreement on a transaction that benefits the people of Canada, T0E3 shippers and .0L shareholders,´ said .0L Chairman and Chief Executive Officer Steve .ean. “The outcome we have reached represents the best opportunity to complete T0E3 and thereby realize the great national economic benefits promised by that project. Our Canadian employees and contractors have worked very hard to advance the project to this critical stage, and they will now resume work in executing this important Canadian project.´ The purchase price alone equates to approximately per restricted voting share on a pre-capital gains tax basis and approximately per restricted voting share after capital gains tax. .0L expects its approximately per cent share of after-tax proceeds to be approximately C . billion.
“In addition to the benefit of the sale proceeds, our remaining portfolio of assets represents a strong platform for the company and shareholders now and in the future. These assets were budgeted to generate approximately half of .0L’s $djusted E%ITD$ excluding capitalized equity financing costs. We continue to invest in expansions of our Canadian assets and look forward to future growth in the service of our customers and our shareholders,´ .ean concluded. .0L will continue to manage a portfolio of strategic infrastructure across Western Canada, including $n integrated network of crude tank storage and rail terminals in $lberta that is one of the largest in the region.
o The crude terminal facilities constitute the largest merchant terminal storage facility in the Edmonton market and the largest origination crude by rail loading facility in 1orth $merica. The 9ancouver Wharves Terminal, the largest mineral concentrate export import facility on the west coast of 1orth $merica. The Cochin 3ipeline system that transports light condensate originating from the 8nited States to )ort Saskatchewan, $lberta.
TD Securities is serving as financial advisor to .0L and is rendering a fairness opinion on the transaction to the .0L board.