RE:This is a dumb ideaManagement indicated (forgot where I read the commentary) something to the effect that they don't have enough human resources to most efficiently manage all the projects on the books and this spinoff will help address that. But then I would ask... why not simply increase the resources within the company?
I think this is a stealth move to dump 'extra' debt ono the oil pipeline biz and thus effectively 'deleverage' the remaining natgas/cleanenergy biz. Advancing KXL did cost a bundle so stick the debt of that effort into the oil pipelins biz (along with opportunity to recapture via lawsuit against the US gov).
The decision to sell 40% of CPG was understandable. TRP levered up heavily to acquire it, so it makes sense to target that same asset base in the deleverage process. The oil pipe spinoff may be the result of being unable to find a buyer so shortly after the recent line rupture.
I prefer they had looked to other non-core asset sales and kept the oil biz inside the company. It adds some diversification. Levered up as the company is though, it has made it hard to 'grow' this segment through acquisitions. Maybe NewOilCo can buy TMX at a deep discount from CanGov via an equity raise (assuming the stock price holds up). Or maybe NewOIlCo stock tanks on spinout and a PE concern scoops it up on the cheap.
I for one am leaning to sell the spinoff shares. Actaully, I intend to VOTE NO to the proposed spinoff.