Parent Sells C&I Retail Supply Business
September 11, 2018 Email This Story Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • firstname.lastname@example.org
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AltaGas Ltd. announced that it has entered into definitive agreements for the sale of non-core midstream and power assets in Canada, including its Canadian C&I retail supply business, and power assets in the United States, for total proceeds of approximately $560 million (all $ Canadian unless otherwise noted). The proceeds from the sale of these assets will be used to repay a significant portion of the bridge facility related to the acquisition of WGL Holdings Inc.
Asset Sale Details
Non-Core Midstream and Power Assets in Canada, Including Canadian C&I Retail Business
AltaGas has entered into definitive agreements with Birch Hill Equity Partners Management Inc., as general partner of Birch Hill Equity Partners Fund V, for the sale of selected non-core smaller scale gas midstream and power assets in Canada, as well as AltaGas' commercial and industrial customer portfolio in Canada, for an aggregate purchase price of approximately $165 million. The transaction also includes the 43.7 million shares of Tidewater Midstream and Infrastructure Inc., which AltaGas currently holds.
AltaGas Ltd. provides natural gas marketing and electricity retail services through its Commercial and Industrial (C&I) Energy Services segment of the business.
AltaGas's Canadian retail business supplies natural gas, electricity, and green electricity (Renewable Energy Certificates) to customers in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, and Quebec (as available by Province.)
This sale of the non-core midstream and power assets are subject to customary closing conditions, various National Energy Board approvals, the Competition Act, Canada Transport Act and various other provincial utilities' commission approvals. The transaction is expected to be completed by year-end.
Non-Core San Joaquin Power Assets in California
AltaGas has entered into an agreement with Middle River Power III, a wholly-owned subsidiary of Avenue Capital, for the sale of gas-fired power assets for a purchase price of approximately USD $300 million (approximately CDN $400 million). These assets comprise the Tracy, Hanford and Henrietta plants totaling 523 MW of capacity.
This sale of the non-core power assets are subject to customary closing conditions, including FERC approval. The transaction has an effective date of September 1, 2018, and is expected to be completed in the fourth quarter of 2018.
More Asset Sales Likely, As Company Focuses on Utility Business
"We expect to have further announcements in the near future on our asset monetizations, which will continue to reshape AltaGas to focus on Gas and U.S. Utilities, while keeping a strong footing in the Power market with a focus on capital light, innovative solutions," stated David Cornhill, Chairman and interim co-Chief Executive Officer of AltaGas. "We remain focused on reshaping AltaGas, directing our capital in high growth areas which will result in strong risk-adjusted returns."
With this announcement, AltaGas has announced or completed approximately $1.5 billion in asset sales to date. The funding strategy for the acquisition of WGL Holdings Inc. remains firmly on track to reach the expected total targeted asset sales of at least $2 billion by fourth quarter 2018.