Canadian energy infrastructure company AltaGas has signed agreements to sell non-core midstream and power assets in Canada and power assets in the US for approximately $560m.


Image: AltaGas signs agreements to offload non-core midstream and power assets in Canada and US. Photo: courtesy of Photo by rawpixel on Unsplash.

Proceeds from the sale will be used by AltaGas to repay a significant portion of the bridge facility related to the acquisition of US-based WGL Holdings.

AltaGas has signed an agreement to sell its selected non-core smaller scale gas midstream and power assets in Canada to Birch Hill Equity Partners Management, as general partner of Birch Hill Equity Partners Fund V.

Additionally, the sale includes AltaGas’ commercial and industrial customer portfolio in Canada, for an aggregate purchase price of $165m.

Birch Hill will also acquire 43.7 million shares of Tidewater Midstream and Infrastructure, which AltaGas currently holds.

Scheduled to be completed by year-end, the transaction is subject to customary closing conditions, various National Energy Board approvals, the Competition Act, Canada Transport Act and various other provincial utilities’ commission approvals.

AltaGas has also agreed to sell gas-fired power assets in California to Middle River Power III, a wholly-owned subsidiary of Avenue Capital, for approximately $300m.

The assets considered for sale include the Tracy, Hanford and Henrietta plants which have a combined capacity of 523MW.

Planned to be completed in the fourth quarter of 2018, the sale is subject to customary closing conditions, including FERC approval.

AltaGas chairman and interim co-chief executive officer David Cornhill said: “We expect to have further announcements in the near future on our asset monetizations, which will continue to reshape AltaGas to focus on Gas and U.S. Utilities, while keeping a strong footing in the Power market with a focus on capital light, innovative solutions.

“We remain focused on reshaping AltaGas, directing our capital in high growth areas which will result in strong risk-adjusted returns.”

Last year, AltaGas signed an agreement to acquire WGL Holdings for C$8.4bn ($6.42bn), including debt, to strength its natural gas distribution business.

WGL Holdings, which owns natural-gas utility Washington Gas, is engaged in providing natural gas, electricity, green power and energy services.