AltaGas sells 35% share of three Canadian hydro plants to raise funds

AltaGas Ltd. will sell 35% of its interest in three hydroelectric facilities in northwestern British Columbia, Canada, for $922 million as part of a strategy intended to raise about $2 billion through asset sales.

AltaGas needs these funds for its acquisition of WGL Holdings Inc.

“The sale of the minority interest in the Northwest hydro facilities is aligned with our asset modernization and funding strategy,” said David Harris, president and chief executive officer of AltaGas. “Our criteria include appropriate value for the assets, shareholder value creation, and credit metric accretion, with the resulting business being consistent with our long-term vision for AltaGas.”

This purchase price implies a 2017 EBITDA multiple of about 27 times and a total value of more than $2.6 billion on a 100% basis for the facilities, according to a press release.

The facilities being partially sold are:

The definitive agreement to sell the share has been entered into “with a joint venture company that is indirectly owned by Axium Infrastructure Inc., as manager of Axium Infrastructure Canada II Limited Partnership, and Manulife Financial Corporation,” according to a press release. The transaction is expected to close before the end of June 2018.

AltaGas will remain the majority holder of the facilities and continue to provide all operational, maintenance and management functions.

Harris said the company expects more than half of the $2 billion in targeted asset sales to be completed by “mid-summer.”

The acquisition of WGL is fully backstopped by a US$3 billion bridge facility and $2.6 billion in equity proceeds raised through a February 2017 subscription receipt offering and private placement.

Click here for more business and finance news.

Previous articleHydro-Quebec, Central Maine Power agree to 20-year cross-border transmission terms
Next articleWorker killed during crane testing at 624-MW Rock Island Dam hydro project in U.S.
Elizabeth Ingram is content director for the Hydro Review website and HYDROVISION International. She has more than 17 years of experience with the hydroelectric power industry. Follow her on Twitter @ElizabethIngra4 .

No posts to display