Canada-based Enbridge’s subsidiary has signed a definitive agreement to divest its 38.9% non-operating minority stake in natural gas distributing company Noverco to investment company Trencap for $943m (C$1.14bn) in cash.
Trencap is a consortium led by pension fund manager Caisse de dépôt et placement du Québec (CDPQ), which holds 64.74% stake, along with minority limited partners including Fonds de solidarité FTQ.
Upon completion of the deal, Trencap’s stake will increase from the existing 61.1% to 100% in Noverco, which owns 100% of energy trader Énergir.
Énergir is a natural gas distributor in Québec, Canada, and produces clean electricity in the province through joint-venture companies. It is 29% owned by Valener, 28% by Enbridge and 43% by a group of shareholders.
Expected to be closed by early 2022, the Noverco transaction is subject to customary regulatory approvals and closing conditions.
Enbridge plans to use the proceeds from the sale to pay back its short-term debt.
Enbridge chief financial officer Colin Gruending said: “We’re pleased to opportunistically monetise this non-strategic financial investment in Noverco at an attractive valuation and surface this value for our shareholders.
“This transaction further enhances our already sector-leading financial strength and flexibility and demonstrates our disciplined approach to capital allocation.”
RBC Capital Markets served as financial adviser to Enbridge on the deal.