October 3 (Renewables Now) - AltaGas Ltd (TSE:ALA), a natural gas-focused energy infrastructure company with some renewables in its portfolio, could raise up to CAD 341 million (USD 266m/EUR 230m) gross from the planned listing of its wholly-owned Canadian unit.
The Calgary-based clean energy company said on Tuesday that AltaGas Canada Inc (ACI) has filed and obtained a receipt for an amended and restated preliminary prospectus with respect to its initial public offering (IPO). ACI proposes to sell 16.5 million common shares at between CAD 15.50 and CAD 18.00 apiece. This will bring in aggregate gross proceeds of CAD 255 million to CAD 341 million, assuming that the over-allotment option is exercised in full.
A final decision of the IPO size and price is expected to be made in late October. AltaGas will hold a stake of 37%-45% in ACI following the floatation, which is being jointly led by RBC Capital Markets, TD Securities Inc and JP Morgan Securities Canada Inc.
The company noted that if the transaction is successfully wrapped up, it will exceed its CAD-2-billion target for asset monetisations, reaching CAD 2.5 billion. The proceeds will help it repay and retire its bridge facility in the final quarter of 2018.
Total cash proceeds for AltaGas from the IPO are seen to be close to CAD 1 billion, including ACI’s sale of common shares and CAD 635 million in new term debt issuance, intercompany loans and the assumption of existing indebtedness.
"Looking beyond the IPO, the repayment of the bridge facility remains our near term priority. We are committed to strengthening our balance sheet and maintaining an investment grade credit rating, which will position us for long-term value creation and growth,” commented David Cornhill, chairman and interim co-CEO of AltaGas.
ACI owns utility and renewable power assets in Canada that are 100% regulated and long-term contracted, with predictable earnings. Among them is the 102-MW Bear Mountain wind park in Dawson Creek, British Columbia, as well as a number of hydropower plants.
(CAD 1.0 = USD 0.779/EUR 0.674)