May 19, 2020

Enbridge to sell $3.2bn of non-core assets to reduce debt

Mergers & Acquisitions
zaymalz malz
2 min
Enbridge to sell $3.2bn of non-core assets to reduce debt

Calgary-based energy firm Enbridge has announced that it has agreed to sell a total of CAD$3.2bn of non-core assets in two separate deals in the aim of reducing its outstanding net debt.

The two deals will allow Enbridge to successfully reach its goal of raising $3bn from the sale of assets in 2018 to reduce this debt – a key part of the company’s overriding $22bn growth program.

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The larger of these will see the Canadian Pension Plan Investment Board acquiring a 49% stake in Enbridge’s two German offshore wind projects and some North American onshore renewable power assets for an initial $1.75bn fee, eventually rising to $2.25bn.

“This transaction, in addition to our other funding actions taken since April, accelerates funding for our secured capital program and gives us increased financial flexibility,” said Enbridge President and CEO Al Monaco.

The remaining funds will be secured from the sale of Enbridge’s US natural gas business known as Midcoast Operating LP to ArcLight Capital Partners in a deal valued at $1.12bn. This transaction will be a 100% sale, with ArcLight Capital set to take on Midcoast’s established basins in Texas, Oklahoma and Louisiana.

“Proceeds from the sale will be used to accelerate the strengthening of our balance sheet and enhance the financial flexibility to fund our industry leading CAD$22 billion secured growth program,” said Monaco.

Off the back of the announcements, Enbridge’s shares rose approximately 2.6%.

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