Enbridge benefits from equity restructuring

Enbridge Energy Partners, L.P. and Enbridge Inc. have announced an agreement to undertake a restructuring of Enbridge Energy Partners’ equity under which its general partner will permanently waive its existing incentive distribution rights in exchange for Class D units and new incentive distribution units. This restructuring will decrease the general partner's share of incremental cash distributions from 48% of all distributions in excess of US$ 0.495 per unit per quarter down to 23% of all distributions in excess of the company’s current quarterly distribution of US$ 0.5435 per unit per quarter. As a result, the share of incremental cash available for distribution to holders of Class A common units will increase correspondingly. The restructuring will be effective 1 July 2014 and will apply to all distributions declared subsequent to that date.

"The company's Liquids Pipelines capital expansion programme currently underway is expected to generate significant low risk cash flow growth over the coming years. This equity restructuring will enhance the economics of the company's investment projects and increase cash flow available for distribution to holders of Class A common units from the existing capital projects as well as from future growth projects," said Mark Maki, President.

Commenting on the restructuring transaction, Al Monaco, Enbridge's President and Chief Executive Officer noted: "Enbridge and Enbridge Energy Partners are in the midst of executing the most significant organic capital growth programme in our history. At the same time, one of Enbridge's strategic priorities is to re-establish Enbridge Energy Partners as a strong sponsored vehicle and an effective source of funding for its own growth and for future drop downs; much the same as the role Enbridge Income Fund plays with the Enbridge group today. This restructuring of the incentive distribution rights builds upon other initiatives undertaken including our preferred unit investment in EEP and the formation of Midcoast Energy Partners, L.P. in 2013. The equity restructuring is expected to benefit Enbridge shareholders by improving Enbridge Energy Partners's cost of capital and growth outlook, thus increasing the incentive distributions to the general partner of the company over time."

Enbridge announces executive changes

In other news. Enbridge Inc. has announced that J. Richard Bird, Executive Vice President, Chief Financial Officer and Corporate Development, plans to retire by the end of 2014. Upon Bird's retirement, his responsibilities will be split into two separate roles of Chief Financial Officer and Chief Development Officer. Enbridge also announced the appointment of John Whelen as Senior Vice President, Finance and of Vern Yu as Senior Vice President, Corporate Development, both reporting to Bird, effective 1 July 2014.

Adapted from press release by Rosalie Starling

Read the article online at: https://www.worldpipelines.com/business-news/19062014/enbridge_benefits_from_equity_restructuring_523/