TSX:PKI - Post Discussion
Post by
retiredcf on Nov 17, 2023 8:49am
More RBC
November 16, 2023
Parkland Corp
Secured dedicated CIB funding for EV network expansion
TSX: PKI | CAD 44.46 | Outperform | Price Target CAD 54.00
Sentiment: Neutral
Parkland announced that the company has secured up to $210 million in financing from Canada Infrastructure Bank (CIB) to support its continued EV charging network expansion. The financing will support a multi-year opportunity set to strengthen Parkland's network in BC, while expanding into other provinces with tangible customer demand, namely Quebec and Ontario. We view the update constructively as we believe the company is well positioned to capture EV market share as consumer demand increases over time.
Details:
• Supportive financing terms. CIB will provide an 18-year financing facility including principal repayments tied to utilization rates for EV chargers. CIB plans to fund up to 80% of capital over the next four years to install chargers, significantly de-risking Parkland's opportunity set. Additionally, Parkland has developed a specific project finance entity tied to this financing, which is non-recourse. This also brings CIB closer to its initial $500 million target for its Charging and Hydrogen Refuelling Investment Initiative.
• Potential for Parkland's EV network. At the recent Investor Day (note here), Parkland reiterated that it currently has 37 operational locations in BC and plans to reach 50 locations by early 2024. While management will continue to invest in the EV network, CIB financing paves the way for a longer-term target of up to 2,000 public fast charging ports, with Parkland specifying additional investment in BC alongside entering the Quebec and Ontario markets. Parkland flagged potential opportunities for additional ports at third-party sites, likely funded through a combination of CIB funding and/or additional third-party capital.
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