- TC Energy (TSX:TRP) shares continued its downward slide this week after the sale of its assets and a CIBC downgrade
- The Calgary-based firm’s were downgraded by CIBC Capital Markets this week from “outperformer” to “neutral” after the first deal in its plan to shed assets had a price tag that was smaller than expected
- The C$5.2 billion deal was announced earlier this week where TC would sell a 40 per cent stake in two major U.S. gas transmission systems to New York City-based Global Infrastructure Partners
- TC Energy Corp. opened at C$48.50 per share
TC Energy (TSX:TRP) shares continued its downward slide this week after the sale of its assets and a CIBC downgrade.
The company’s stock lost more than 4.5 per cent in early Wednesday trading, adding to its 10 per cent decline year-to-date and its 31.4 per cent drop since this time last year.
The Calgary-based firm was downgraded by CIBC Capital Markets this week from “outperformer” to “neutral” after the first deal in its plan to shed assets had a price tag that was smaller than expected.
The C$5.2 billion deal was announced earlier this week where TC would sell a 40 per cent stake in two major U.S. gas transmission systems, the Columbia Gas Transmission, LLC and Columbia Gulf Transmission, LLC to New York City-based Global Infrastructure Partners (GIP).
This is the first move in TC’s divestiture program, which is aimed at shaping up its balance sheet by the end of the year by selling non-core assets.
TC Energy will continue to operate the systems and will jointly invest in annual maintenance, modernization, and sanctioned growth capital with GIP.
TC Energy management evaluates deleveraging
TC Energy’s president and Chief Executive Officer, François Poirier, said in a news release that the company has advanced its deleveraging goals through this C$5 billion-plus asset divestiture program.
“As part of our ongoing capital rotation program, we continue to evaluate opportunities to further our deleveraging objectives and optimally fund our secured capital program. Our commitment to strong balance sheet fundamentals and disciplined sanctioned net capital spending of C$6 (billion) to C$7 billion annually post-2024 will continue to provide the foundation for a long-term sustainable annual dividend growth rate of 3 to 5 per cent,” Poirier said in a statement.
The transaction is expected to close in Q4 2023.
TC Energy Corp. is an energy infrastructure company consisting of pipeline and power generation assets in Canada, the United States and Mexico.
TC Energy Corp. opened at C$48.50 per share.
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