Canadian utility AltaGas has signed an agreement to sell 35% stake in three hydroelectric projects in Northwest British Columbia for C$922m ($707.87m).
The definitive agreement has been signed with a joint venture company that is indirectly owned by Axium Infrastructure as manager of Axium Infrastructure Canada II, and Manulife Financial.
The hydroelectric facilities considered for sale include 195MW Forrest Kerr, the 16MW Volcano Creek, and the 66MW McLymont Creek which are located in Tahltan First Nation territory.
Representing a total capital cost of approximately $1bn, the facilities are supported by three separate 60-year, fully indexed electricity purchase agreements with BC Hydro.
The sale is a part of the firm’s asset monetization and funding strategy for the proposed acquisition of US-based WGL Holdings.
As part of larger funding strategy related to the acquisition of WGL, AltaGas plans to raise approximate $2bn through asset sales.
AltaGas president and CEO David Harris “We continue to be very confident in completing our long-term financing plan in the next several months, and with the sale of the Facilities and certain anticipated non-core assets, we expect over half of the $2 billion in targeted asset sales to be completed by mid-summer.
“We also continue to advance discussions for the monetization of certain additional assets, which we expect to conclude in the third quarter.
“We look forward to closing the acquisition of WGL. The business combination is a compelling one, with accretive earnings per share and cash flow per share growth, a business with a strong balance sheet, and a balanced portfolio of high quality energy infrastructure assets.”
Subject to closing adjustments and customary closing conditions, the transaction is scheduled to be completed by the end of June 2018.
AltaGas, however, which will retain majority stake in the projects. It will also continue to provide all operational, maintenance and management functions.