Stockwatch – Calgary-based energy company TransCanada Corporation (TSE:TRP, Mkt cap 39.03B, P/E 22.59, Div/yield 0.48/3.48, EPS 2.44, Shares 707.91M) has agreed to sell its remaining 30% stake in Bison Pipeline LLC to its master limited partnership, TC PipeLines LP, for US$215 million.
The pipeline firm holds a 28% interest in TC PipeLines LP, a U.S. master limited partnership that was formed to acquire, own and actively participate in the management of U.S. natural gas pipelines and related assets.
The sale of Bison Pipeline to the partnership allows TransCanada to raise more cash to fund its $38 billion capital program and expands and diversifies the partnership’s asset base, TransCanada’s president and chief executive Russ Girling said in a statement.
The company said that through its capital program and “ongoing growth in its three core businesses, underpinned by its asset base and financial strength” it is in a favourable position to allow for significant growth in earnings, cash flow and dividends.
Bison is a 487-kilometre natural gas pipeline connecting Rocky Mountain gas supply to downstream markets through the Northern Border pipeline system. The pipeline was put in place in 2010 and brought into service in January 2011.
TransCanada says that it has a number of other U.S. gas pipeline assets available to be sold into the partnership, which, alongside Bison, are expected to generate some US$500 million of EBITDA in 2016 and beyond.
TransCanada stated that it “remains wholly-committed to enhancing shareholder value including the continuous evaluation of its approach to capital allocation.”
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