CorEnergy Infrastructure Trust, Inc. has announced entry into a definitive agreement to sell its MoGas and Omega pipeline systems to Spire Inc. for approximately US$175 million in cash, subject to final working capital adjustments. The MoGas System is an interstate natural gas transmission and distribution system providing service to markets in Missouri and Illinois in the US.
Transaction highlights
- All-cash transaction valued at approximately US$175 million.
- Expected to close in the 3Q23, subject only to anti-trust clearance and customary closing conditions.
- Estimated US$165 million of net proceeds after taxes and transaction-related costs.
- Net proceeds will be used to repay all CorEnergy bank debt at closing, approximately US$100 million.
Dave Schulte, Chairman and CEO of CorEnergy, said: “The sale of our MoGas and Omega systems enables us to significantly de-leverage our balance sheet and strengthen our overall capital structure. This is one of several 2023 initiatives we are undertaking to improve our balance sheet and operating results, including proposed tariff increases and corporate cost reductions.”
“The team at MoGas and Omega has produced reliably profitable results and an excellent safety record as a part of CorEnergy, and we wish to thank them for their dedicated service over the past several years,” said Schulte. “Spire shares our commitment to providing safe, reliable, and environmentally sustainable service to the customers and communities that we serve, and we are pleased they will retain our field operating personnel.”
The company plans to provide an updated 2023 outlook, including opportunities within its California energy transition and other business initiatives, after the transaction has closed.
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