The transaction will allow Trencap to hold 100% of Noverco that owns Énergir
North American energy infrastructure company Enbridge has signed an agreement to sell its 38.9% stake in Noverco to Trencap for $1.14bn in cash.
The transaction is expected to enable Caisse de dépôt et placement du Québec (CDPQ) to increase its majority interest in natural gas distributor Énergir.
Currently, CDPQ owns a 64.74% stake in Trencap, alongside partners including the Fonds de solidarité FTQ.
Upon closing of the transaction, Trencap will own 100% of Noverco, which owns 100% of Énergir, a Quebec-based business engaged in gas distribution and power distribution in Quebec and Vermont.
CDPQ executive vice-president and infrastructure head Emmanuel Jaclot said: “CDPQ’s first investment in Énergir dates back to 2004. For more than 15 years, we have been supporting this Québec company in its growth and diversification, in both Québec and the United States.
“With this transaction, CDPQ is furthering its support of Énergir, an innovative business that is working to decarbonize its operations for the benefit of its customers, for example by focusing on energy efficiency and renewable gas, thus contributing to a greener North American economy.”
Énergir holds assets valuing more than $8bn and 530,000 customers across Québec and the northeastern US.
The company said that half of its assets are currently involved in production and distribution of electricity and renewable energies and in delivering energy services.
Apart from being a distributor of natural gas in Québec, Énergir is also involved in generating electricity in the province from wind power through joint-venture companies.
In the US, Énergir generates electricity from hydro, wind and solar sources, through subsidiaries and other investments.
Enbridge intends to use the sale proceeds to initially repay short term debt.
The transaction is expected to be closed by early 2022, subject to the receipt of certain regulatory approvals and customary closing conditions.
RBC Capital Markets is serving as financial advisor to Enbridge on the transaction.