TransCanada PipeLines Ltd. (TCPL) reported yesterday that it nowexpects proceeds from its non-core asset divestiture program torise from the previous estimate of $3 billion to $3.45 billion. Asa direct result of this, the company expects to record a positive$200 million after-tax adjustment to last year’s provision fordiscontinued operations in the third quarter of 2000.

The company also announced it expects to record gains on assetsales in continuing operations of $45 million after-tax in 2000,resulting in a total positive adjustment from its divestitureprogram of $245 million, or 52 cents per share in 2000. TCPL willannounce its third quarter results on Oct. 31.

In December 1999, the company announced it had decided to pursue anarrower, more focused set of growth opportunities around its corebusinesses, opportunities it believed would ultimately maximize itsshareholders’ value, and pay down debt. To do so, TCPL said it wouldsell $3 billion worth of non-core assets including its midstreambusinesses, international businesses, Express System crude oilpipeline, and Cancarb (see Daily GPI, Dec. 9, 1999).

Due to losses associated with certain long term natural gascontracts entered into in previous years to support pipelineinvestments and specific business initiatives, TCPL said it willrecord a $120 million loss, but because of its asset sales, thecompany expects to record a total of $125 million after-tax gain inits 2000 accounts.

“With our recent sales of the Express System and Metrogas, we’venow sold or have agreements to sell approximately $3 billion ofassets under our divestiture program,” said Doug Baldwin,TransCanada’s CEO. “I’m proud to say the divestiture program isachieving our intended result of strengthening TransCanada’sbalance sheet and providing the solid financial foundation for thecompany’s future growth.”

During this year, TCPL has already repurchased or retired about$1.75 billion of preferred shares and term debt. The company alsoannounced plans yesterday to repurchase $200 million of CumulativeRedeemable First Preferred Shares Series S in early November.

Baldwin said TCPL will continue to take advantage of growthopportunities where the company has a competitive advantage. “Forexample, this year we announced the development of two newcogeneration power projects in Alberta, acquired the rights to 560MW of capacity from an Alberta thermal generating power plant, andraised our ownership in the 560 MW Ocean State Power plant to100%,” he said.

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