AltaGas may sell more of 277-MW British Columbia HPP portfolio

AltaGas Ltd (TSE:ALA) yesterday said it may divest an additional stake in its 277-MW portfolio of run-of-river hydroelectric facilities in British Columbia, Canada after in June it pocketed CAD 922 million (USD 702m/EUR 618m) by selling a 35% interest in the same.

The Northwest British Columbia Hydro Electric Facilities portfolio includes the 195-MW Forrest Kerr Hydroelectric Facility, operational since October 2014, the 16-MW Volcano Creek Hydroelectric Facility, operational since December 2014, and the 66-MW McLymont Creek Hydroelectric Facility, operational since October 2015. The hydropower plants (HPPs) sell their output under separate 60-year, fully indexed electricity purchase agreements with BC Hydro.

The portfolio represents an investment of roughly CAD 1 billion. The stake sale in the summer implied a 2017 EBITDA multiple of roughly 27 times and a total value of over CAD 2.6 billion for 100% of the assets. The buyer is a joint venture between Axium Infrastructure Inc and Manulife Financial Corp. AltaGas remained majority owner of the HPPs and continued to be in charge of all operational, maintenance and management functions.

Any monetisation of an additional interest in the HPPs would support a broader asset sales plan by AltaGas to fund capital projects and align its underlying assets to its strategic focus on gas and US utilities, the company said on announcing its third-quarter results. It also said it has made significant progress on the repayment of its bridge facility for the CAD-9-billion acquisition of US utility WGL Holdings Inc, which was finalised in July. Thanks to completed and announced asset sales, the balance of the bridge facility, amounting to USD 1.2 billion, is expected to be repaid by the end of 2018.

(CAD 1 = USD 0.76/EUR 0.67)

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