TCPL's Asset Divestiture Target Rises to $3.45 Billion
TransCanada PipeLines Ltd. (TCPL) reported that it now expects proceeds
from its non-core asset divestiture program to rise from the previous estimate
of $3 billion to $3.45 billion. As a direct result of this, the company
expects to record a positive $200 million after-tax adjustment to last
year's provision for discontinued operations in the third quarter of 2000.
The company also announced it expects to record gains on asset sales
in continuing operations of $45 million after-tax in 2000, resulting in
a total positive adjustment from its divestiture program of $245 million,
or 52 cents per share in 2000. TCPL will announce its third quarter results
on Oct. 31.
In December 1999, the company announced it had decided to pursue a narrower,
more focused set of growth opportunities around its core businesses, opportunities
it believed would ultimately maximize its shareholders' value, and pay
down debt. To do so, TCPL said it would sell $3 billion worth of non-core
assets including its midstream businesses, international businesses, Express
System crude oil pipeline, and Cancarb (see NGI, Dec.
Due to losses associated with certain long term natural gas contracts
entered into in previous years to support pipeline investments and specific
business initiatives, TCPL said it will record a $120 million loss, but
because of its asset sales, the company expects to record a total of $125
million after-tax gain in its 2000 accounts.
"With our recent sales of the Express System and Metrogas, we've
now sold or have agreements to sell approximately $3 billion of assets
under our divestiture program," said Doug Baldwin, TransCanada's CEO.
"I'm proud to say the divestiture program is achieving our intended
result of strengthening TransCanada's balance sheet and providing the solid
financial foundation for the company's future growth."
During this year, TCPL has already repurchased or retired about $1.75
billion of preferred shares and term debt. The company also announced plans
to repurchase $200 million of Cumulative Redeemable First Preferred Shares
Series S in early November.
Baldwin said TCPL would continue to take advantage of growth opportunities
where the company has a competitive advantage. "For example, this
year we announced the development of two new cogeneration power projects
in Alberta, acquired the rights to 560 MW of capacity from an Alberta thermal
generating power plant, and raised our ownership in the 560 MW Ocean State
Power plant to 100%," he said.
©Copyright 2000 Intelligence Press, Inc. All rights reserved.
The preceding news report may not be republished or redistributed in whole
or in part without prior written consent of Intelligence Press, Inc.