(Calgary) TC Energy is poised to sell beyond its $3 billion asset target for this year, and is currently in contact with several interested buyers in anticipation of what could happen. materialize in two to four transactions.
The company’s president and CEO, François Poirier, revealed Friday that the Calgary-headquartered pipeline operator has several divestiture processes underway and hopes to make at least one sale announcement. assets during the first half of the year.
“We’re having a lot of conversations right now. Not only is there competition within processes, but there is also competition between processes,” explained Mr. Poirier during a conference call with analysts to discuss TC Énergie’s fourth quarter results.
“So to the extent that we might see attractive valuations, we would be willing to consider exceeding the 3 billion target. »
The target of 3 billion in asset sales, which the company is “resolutely” determined to achieve in 2024 according to Mr. Poirier, was set when TC Énergie finalized the sale of a 40% stake in its Columbia systems Gas and Columbia Gulf to the New York company Global Infrastructure Partners for 5.3 billion.
Although the transactions the company hopes to close in 2024 will not be as large, Mr. Poirier assured that they have attracted considerable interest from the market.
These smaller deals tend to expand the pool of potential buyers, because more of them can afford to write a check of that size. We have therefore seen great interest in the various processes that are underway.
François Poirier, President and CEO of TC Énergie
Pay off debt
TC Énergie is looking to sell assets to repay its debt. The company is under close scrutiny from investors and credit rating agencies due to its heavy debt load as well as skyrocketing costs for Coastal GasLink, a 670-kilometer gas pipeline project which she completed last fall.
Coastal GasLink – which will transport natural gas from Western Canada to LNG Canada’s Shell-led processing and export facility, currently under construction in Kitimat, British Columbia – was one of the largest projects energy infrastructure in recent Canadian history and its success constitutes a significant achievement for TC Energy.
But the project also put pressure on the company’s balance sheet. As construction progressed, the project budget increased from 6.2 billion to 11.2 billion, then increased again to 14.5 billion.
TC Énergie is still trying to recover possible recoveries from contractors to offset part of the increase in costs.
Mr. Poirier also said Friday that TC Énergie continues to make progress toward its goal of splitting itself into two separate companies, splitting its pipeline operations.
The new pipeline company, to be called South Bow Corp, will be headquartered in Calgary with an office in Houston, Texas.
She will focus on improving the value of the company’s 4,900 kilometers of crude oil pipelines, including the Keystone pipeline system, which transports Alberta oil to refining markets in the U.S. Midwest and the American Gulf Coast.
Mr. Poirier confirmed that the goal is still to hold a shareholder vote on the split proposal by mid-year.
Dividend on the rise
Also on Friday, TC Énergie increased its dividend by announcing a profit of 1.46 billion in the fourth quarter. The quarterly dividend will now be 96 cents per share, compared to 93 cents per share.
This increase in the payment to shareholders came as TC Énergie announced that its profit amounted to $1.41 per share for the quarter which ended December 31.
This compares with a loss of $1.45 billion, or $1.42 per share, that was reported in the final three months of 2022, when the company took a large one-time charge related to rising costs. from Coastal GasLink.
TC Energy noted that its comparable earnings per share came to $1.35 during its most recent quarter, up from comparable earnings of $1.11 per share a year earlier.
Revenue for the quarter totaled $4.24 billion, compared to $4.04 billion in the fourth quarter of 2022.