CALGARY, Jan. 22, 2018 /CNW/ - Enbridge Inc. (Enbridge or
the Company) (TSX:ENB)(NYSE:ENB) and Spectra Energy Partners, LP
(SEP) (NYSE:SEP) today announced execution of a definitive
agreement, resulting in Enbridge converting all of its incentive
distribution rights (IDRs) and general partner (GP) economic
interests in SEP into 172.5 million newly issued SEP common units.
As part of the transaction, all of the IDRs have been eliminated.
The 172.5 million newly issued SEP common units have a value of
approximately US$7.2 billion based on
the volume-weighted average price of SEP common units over the past
twenty days. The transaction value represents a multiple of 15.7x
forecast 2018 GP/IDR cash flow and is expected to be breakeven to
SEP's distributable cash flow per common unit by the second half of
2019 and be accretive thereafter.
Enbridge now holds a non-economic GP interest in SEP and owns
approximately 403 million SEP common units, representing
approximately 83% of SEP's outstanding common units.
The transaction provides significant benefits to all SEP common
unitholders. The elimination of the IDRs will improve SEP's
competitiveness and growth potential by permanently improving its
cost of capital, thereby improving value for both SEP unitholders
and Enbridge. The transaction also simplifies SEP's capital
structure and further aligns the interests of all SEP
unitholders. SEP maintains its current guidance of 7%
distribution growth in 2018 and 4-6% distribution growth in
2019-20, distribution coverage of 1.1x to 1.2x and a strong credit
profile of sub 4.0x Debt/EBITDA.
Bill Yardley, President and
Chairman of the Board of SEP added, "Today's transaction improves
SEP's long-term value proposition. With an improved cost of
capital, we are even better positioned to improve and extend SEP's
distribution growth outlook through organic growth projects,
potential future drop downs from Enbridge and third party
acquisitions."
"We are pleased to have completed this transaction which we
believe is a win-win for both Enbridge and SEP," said Al Monaco, President and Chief Executive Officer
of Enbridge. "An even stronger SEP supports our strategic priority
to continue to grow our natural gas business. The transaction also
simplifies SEP and reinforces its value proposition as a
best-in-class MLP that will create long-term benefits for investors
in both organizations."
The Enbridge Board of Directors reviewed and approved this
transaction with assistance from Barclays Capital Inc., acting as
Enbridge's financial advisor, and Sullivan & Cromwell LLP and
Vinson & Elkins LLP, acting as Enbridge's legal and tax
advisors. The terms of the transaction were unanimously approved by
the Board of Directors of the general partner of SEP, based on the
unanimous approval and recommendation of the SEP GP board's
conflicts committee, which is comprised entirely of independent
directors. The conflicts committee engaged Jefferies LLC to act as
its financial advisor and Locke Lord LLP to act as its legal
advisor.
The transaction closed immediately after the signing of the
definitive agreement.
FORWARD-LOOKING INFORMATION
This release includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. Forward-looking
statements are based on our beliefs and assumptions. These
forward-looking statements are identified by terms and phrases such
as: anticipate, believe, intend, estimate, expect, continue,
should, could, may, plan, project, predict, will, potential,
forecast, and similar expressions. Forward-looking statements
involve risks and uncertainties that may cause actual results to be
materially different from the results predicted. Factors that could
cause actual results to differ materially from those indicated in
any forward-looking statement include, but are not limited to:
state, federal and foreign legislative and regulatory initiatives
that affect cost and investment recovery, have an effect on rate
structure, and affect the speed at and degree to which
competition enters the natural gas and oil industries; outcomes of
litigation and regulatory investigations, proceedings or inquiries;
weather and other natural phenomena, including the economic,
operational and other effects of hurricanes and storms; the timing
and extent of changes in commodity prices, interest rates and
foreign currency exchange rates; general economic conditions,
including the risk of a prolonged economic slowdown or decline, or
the risk of delay in a recovery, which can affect the long-term
demand for natural gas and oil and related services; potential
effects arising from terrorist attacks and any consequential or
other hostilities; changes in environmental, safety and other laws
and regulations; the development of alternative energy resources;
results and costs of financing efforts, including the ability to
obtain financing on favorable terms, which can be affected by
various factors, including credit ratings and general market and
economic conditions; increases in the cost of goods and services
required to complete capital projects; declines in the market
prices of equity and debt securities and resulting funding
requirements for defined benefit pension plans; growth in
opportunities, including the timing and success of efforts to
develop U.S. and Canadian pipeline, storage, gathering, processing
and other related infrastructure projects and the effects of
competition; the performance of natural gas and oil transmission
and storage, distribution, and gathering and processing facilities;
the extent of success in connecting natural gas and oil supplies to
gathering, processing and transmission systems and in connecting to
expanding gas and oil markets; the effects of accounting
pronouncements issued periodically by accounting standard-setting
bodies; conditions of the capital markets during the periods
covered by forward-looking statements; and the ability to
successfully complete merger, acquisition or divestiture plans;
regulatory or other limitations imposed as a result of a merger,
acquisition or divestiture; and the success of the business
following a merger, acquisition or divestiture. These factors, as
well as additional factors that could affect our forward-looking
statements, are described under the headings "Risk Factors" and
"Cautionary Statement Regarding Forward-Looking Information" in our
2016 Form 10-K, filed on February 24, 2017, and in our other
filings made with the Securities and Exchange
Commission (SEC), which are available via
the SEC's website at www.sec.gov. In
light of these risks, uncertainties and assumptions, the events
described in the forward-looking statements might not occur or
might occur to a different extent or at a different time than we
have described. All forward-looking statements in this release are
made as of the date hereof and we undertake no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
ABOUT SPECTRA ENERGY PARTNERS
Spectra Energy Partners, LP is one of the largest pipeline
master limited partnerships in the United
States and connects growing supply areas to high-demand
markets for natural gas and crude oil. These assets include
more than 15,000 miles of transmission pipelines, approximately 170
billion cubic feet of natural gas storage, and approximately 5.6
million barrels of crude oil storage. Spectra Energy
Partners, LP is traded on the New
York stock exchange under the symbol SEP; information about
the company is available on its website at
www.spectraenergypartners.com.
ABOUT ENBRIDGE INC.
Enbridge Inc. is North
America's premier energy infrastructure company with
strategic business platforms that include an extensive network of
crude oil, liquids and natural gas pipelines, regulated natural gas
distribution utilities and renewable power generation. The
Company safely delivers an average of 2.8 million barrels of crude
oil each day through its Mainline and Express Pipeline; accounts
for approximately 65% of U.S.-bound Canadian crude oil exports; and
moves approximately 20% of all natural gas consumed in the U.S.,
serving key supply basins and demand markets. The Company's
regulated utilities serve approximately3.6 million retail customers
in Ontario, Quebec, New
Brunswick and New York State. Enbridge also has
interests in more than 2,500 MW of net renewable generating
capacity in North America and
Europe. The Company has ranked on the Global 100 Most
Sustainable Corporations index for the past eight years; its common
shares trade on the Toronto and
New York stock exchanges under the
symbol ENB.
Life takes energy and Enbridge exists to fuel people's
quality of life. For more information, visit
www.enbridge.com.
For more information please contact:
Enbridge Inc. – Media
Suzanne Wilton
(403) 231-7385 or Toll Free: (888) 992-0997
suzanne.wilton@enbridge.com
Enbridge Inc. – Investment Community
Jonathan Gould
Toll Free: (800) 481-2804
jonathan.gould@enbridge.com
Spectra Energy Partners – Media
Michael Barnes
Toll Free: (888) 992-0997
michael.barnes@enbridge.com
Spectra Energy Partners – Analysts and Investors
Roni Cappadonna
Toll Free: (800) 481-2804
roni.cappadonna@enbridge.com
SOURCE Enbridge Inc.
