- TC Energy (TSX:TRP) will separate into two independent publicly listed companies through the spinoff of its liquids pipelines business
- The Calgary-based firm’s stock was down 4.7 per cent by midday Friday trading after the news
- The intent is to provide both companies with flexibility to pursue their own growth objectives through capital allocation and enhancing efficiencies
- TC Energy Corp. opened at C$46.78 per share
TC Energy (TSX:TRP) will separate into two independent publicly listed companies through the spinoff of its liquids pipelines business.
The Calgary-based firm’s stock was down 4.7 per cent by midday Friday trading after the news.
The intent is to provide both companies with flexibility to pursue their own growth objectives through capital allocation and enhancing efficiencies.
TC Energy post-transaction will aim to be a diversified natural gas and energy solutions company that is positioned to meet industry and consumer demand for reliable energy, by leveraging complementary business sets. TC Energy will focus on natural gas infrastructure driven by nuclear, pumped hydro energy storage and new energy opportunities.
The liquids pipelines company will be a critical infrastructure company with assets that connect its supply to the highest demand markets. This company will work to increase capacity on underutilized portions of the system and increase connectivity to additional receipt and delivery points.
TC Energy’s president and chief executive officer, François Poirier, said in a news release that its expansive strategic asset base highlights what he calls a “competitive advantage” in capturing opportunities and translating them into enduring value.
“We will be an increasingly utility-weighted business with a stable balance sheet, a higher expected comparable EBITDA compound annual growth rate of 7 per cent and a solid 3-5 per cent annual dividend growth outlook,” he said in a statement. “This week, we also accelerated our deleveraging goal by entering into definitive agreements to raise $5.2 billion in total cash proceeds ahead of our year-end target with the announced sale of a 40 per cent equity interest in the Columbia Gas and Columbia Gulf systems. Further, we are safely delivering our major projects such as Coastal GasLink and Southeast Gateway on the planned cost and schedule.”
The transaction is expected to be complete by the second half of next year.
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$46.78 per share and has fallen 16.4 per cent since the year began, down 33.9 per cent since this time last year.
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