Veresen Inc. T.VSN.DB.B

RE:RE:RE:RE:6.81 now

[Beckysboss]

smoking81 wrote: They have raised lots of money to complete Jordan Cove. This will not happen for some time but there is not enough income to pay 15% dividend and wait for Jordan Cove to happen. They will announce a dividend cut shortly and people are pricing this into the stock. Their best bet is a buy out from Enbridge.

  Have you ever read their financials? Veresen has no problem covering the dividend, fact is the last 3 qtrs  they paid out only about 1/3 of their distributable cash generated in actual cash dividends. VSN has a substantial DRIP program,  more than 1/2 the dividends in 2015 were taken as shares.  This allows them to re-invest that distributable cash in ongoing projects, if you listened to the Whister Conf presentation you would know that.  There is no reason for them to cut the divvy.  To date in 2015 (the last 3 qtrs) VSN generated $211 mill in distributable income and paid $80.1 mill out in cash dividends.  

   VSN has a solid business generating substantial cash thru take or pay contracts on both their Alliance and Ruby pipelines as well as their Pwr Generation facilities.  The only weak portion as of the last year is their midstream operations,  that is already factored into the 2016 guidance.  The Jordan Cove facility will be built with financing,  they are currently spending some front end money on this but nothing they can't afford. If and when they sign 20 yr take off agreements then the financing thru world class banks will be done,  I doubt there will be much equity involved with that,  just debt built on those contracts.  That is unlikely at this point though,  until you hear those off take contracts are signed Jordan Cove is not going to proceed.  They aren't spending much on Jordan Cove,  it is covered in their financials.