Kinder Morgan Inc. has announced a final investment decision for the Trans Mountain Expansion Project in conjunction with its indirect subsidiary, Kinder Morgan Canada Ltd (KML), pricing its initial public offering (the Offering) of 102.9 million shares of common stock at a price to the public of CAN$17.00 per share for total gross proceeds of CAN$1.75 billion.
The final investment decision is conditioned on the successful completion of the IPO, which is expected to take place by not later than May 2017.
“Upon the completion of the IPO, we will have secured satisfactory financing for the Trans Mountain Expansion Project. We are excited to be moving forward on this tremendous project which is expected to benefit KMI and KML as well as our Trans Mountain shippers and Canada,” said Steve Kean, Kinder Morgan Chief Executive Officer. “The KML IPO is one of the largest ever in Canada and provides Canadian investors the opportunity to invest in a leading integrated midstream set of western Canadian assets. We are very pleased to price the Offering and excited about the future growth opportunities that this platform enables. The Offering also strengthens KMI’s balance sheet and strengthens our ability to return value to shareholders.”
“Our execution planning is complete, our approvals are in hand, and we are now ready to commence construction activities this fall generating thousands of direct jobs for Canadians, including significant benefits to Indigenous communities in Alberta and British Columbia,” said Ian Anderson, President of Kinder Morgan Canada Ltd.
The Trans Mountain Expansion Project is a CAN$7.4 billion project, which upon completion will provide western Canadian oil producers with an additional approximately 590 000 bpd of shipping capacity and tidewater access to the western United States and global markets.
The final investment decision was dependent on securing financing.
The Offering constitutes a sale of a portion of KMI’s interest in the Canadian business of KMI (the Business). The Business is composed of: the Trans Mountain pipeline system (including related terminals assets), the Puget Sound pipeline, the Jet Fuel pipeline system, the Canadian portion of the Cochin pipeline system, the Vancouver Wharves Terminal and the North 40 Terminal; as well as three jointly controlled investments: the Edmonton Rail Terminal, the Alberta Crude Terminal and the Base Line Terminal.
KMI will use the proceeds it receives to pay down debt. As a result, KMI now expects to end the year at approximately 5.2X debt to EBITDA versus its budget of 5.4X and remains on track to announce revised dividend guidance for 2018 in the latter part of this year, consistent with the previously announced goal of returning additional value to shareholders. Upon closing of the offering, KMI will own an approximately 70% interest in the Business, which will be operated and administered by KML and its affiliates.
Read the article online at: https://www.worldpipelines.com/business-news/26052017/kinder-morgan-secures-final-investment/