- Tidewater Midstream and Infrastructure stock (TSX:TWM) spiked after a $650 million asset sale to AltaGas (TSX:ALA)
- The company sold its Pipestone natural gas plant, Pipestone expansion project and Dimsdale natural gas storage facility, as well as associated infrastructure
- It will use the proceeds for general corporate purposes, including paying down its senior credit facility
- Tidewater Midstream’s operations include downstream facilities, natural gas processing facilities, natural gas liquids infrastructure, pipelines, storage and various renewable initiatives
- Tidewater Midstream and Infrastructure stock (TSX:TWM) opened with a gain of 9.2 per cent trading at $1.06 per share
Tidewater Midstream and Infrastructure stock (TSX:TWM) spiked after a $650 million asset sale to AltaGas (TSX:ALA).
Tidewater will receive $325 million in cash and $325 million in AltaGas common shares for its Pipestone natural gas plant, Pipestone expansion project and Dimsdale natural gas storage facility, as well as associated infrastructure.
The company intends to allocate the proceeds to general corporate purposes, including repayment of its senior credit facility.
Management rationale for the transaction
- Highly accretive transaction metrics
- Improved financial strength and liquidity, with minimal credit facility draws net of transaction consideration
- Following the successful turnaround of its Prince George refinery, management believes the transaction positions the company for “material near-term growth in consolidated cash flow,” according to a statement released Thursday, from its 69 per cent ownership in Tidewater Renewables (TSX:LCFS), an energy transition company in the final stages of commissioning Canada’s first renewable diesel refinery
“We believe the transaction unlocks significant value for our shareholders while strengthening our balance sheet to better address opportunities across our diversified portfolio of energy and energy transition infrastructure assets,” Rob Colcleugh, Interim CEO of Tidewater, said in the statement.
The companies expect the transaction to close in Q4 2023.
Tidewater Midstream remains focused on identifying value across its midstream, downstream and renewable fuels assets. It expects its midstream assets to experience strong demand for natural gas processing, extraction/fractionation, storage and marketing services across Western Canada.
Tidewater Midstream is dedicated to generating profitable growth and shareholder value in the North American natural gas, natural gas liquids, crude oil, refined product and renewable energy value chains. Its operations include downstream facilities, natural gas processing facilities, natural gas liquids infrastructure, pipelines, storage and various renewable initiatives. The company also markets crude, refined product, natural gas, natural gas liquids and renewable products and services to customers across North America.
Tidewater Midstream and Infrastructure stock (TSX:TWM) opened with a gain of 9.2 per cent trading at $1.06 per share. The stock is down by approximately 25 per cent over the past five years.
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