Inter Pipeline has signed a definitive agreement to sell a significant portion of its European bulk energy storage assets to Spanish company CLH Group for £420m (around $715m).
Under the terms of the agreement, the Spanish firm will acquire Inter Pipeline’s 15 storage terminals in the UK, Ireland, Netherlands and Germany.
These assets have a storage capacity of 18 million barrels.
The terminals involved in the transaction account for about two-thirds of Inter Pipeline’s cashflow from its European operations.
Expected to be completed in the fourth quarter of this year, the transaction is subject to closing conditions and necessary regulatory approvals.
Inter Pipeline president and CEO Christian Bayle said: “This is a very positive transaction for Inter Pipeline. Monetising a significant portion of our European asset base enables us to focus resources on developing our higher growth Canadian businesses.
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By GlobalData“As such, proceeds from the sale will be used to reduce debt, strengthen our balance sheet, and assist with financing our large capital expenditure programme, including the Heartland Petrochemical Complex.”
Inter Pipeline noted that it will continue to own and operate its eight terminals located in Denmark and Sweden.
Morgan Stanley has been appointed as the financial advisor to Inter Pipeline for the deal.
In December 2016, Inter Pipeline signed an agreement to acquire Canadian Natural Resources’ 15% interest in the Cold Lake pipeline system for $527.5m.
