Williams, Williams Partners Complete Sale of Canadian Assets for $1.38 Billion CAD (~$1.06 Billion USD)
September 23 2016 - 11:10AM
Business Wire
Williams (NYSE: WMB) and Williams Partners (NYSE: WPZ) announced
today the completion of the sale of their Canadian businesses to
Inter Pipeline Ltd. (“Inter Pipeline”) (TSX: IPL). The combined
cash proceeds amounted to $1.38 billion CAD between the partnership
and company.
In connection with the sale, Williams agreed to waive $150
million USD of incentive distribution rights in the quarter
following closing to facilitate the partnership’s consent to the
sale in recognition of the value of inter-company contracts. After
taking into account this waiver, the division of the combined sales
price between the entities is ~$839 million USD for Williams
Partners and ~$220 million USD for Williams. The partnership and
the company plan to use the cash proceeds from the transactions to
reduce borrowings on credit facilities.
Certain amounts are required to be withheld and deposited into
escrow accounts in accordance with the sale agreements. At closing,
$105 million CAD of Williams’ proceeds were placed in escrow
pending the receipt of certain credits being pursued by the
Canadian businesses. In compliance with certain tax rules
pertaining to a sale of Canadian assets by a foreign parent, 25
percent of the total proceeds, after the withholding described
above, were deposited with an escrow agent pending receipt of
Canadian Revenue Agency tax clearance which is expected in late
2016 or early 2017. The company and the partnership do not expect a
taxable gain on the transactions.
“Completing this transaction represents further progress on the
commitment we made in early 2016 to strengthen our balance sheet
and position Williams for continued growth,” said Alan Armstrong,
Williams’ president and chief executive officer. “This action
enhances our ability to deliver on our natural gas focused-strategy
and emphasis on our core business.”
TD Securities Inc. acted as lead financial advisor and Barclays
acted as a co-advisor to Williams on the transactions.
About Williams
Williams (NYSE: WMB) is a premier provider of large-scale
infrastructure connecting U.S. natural gas and natural gas products
to growing demand for cleaner fuel and feedstocks. Headquartered in
Tulsa, Okla., Williams owns approximately 60 percent of Williams
Partners L.P. (NYSE: WPZ), including all of the 2 percent
general-partner interest. Williams Partners is an industry-leading,
large-cap master limited partnership with operations across the
natural gas value chain from gathering, processing and interstate
transportation of natural gas and natural gas liquids to petchem
production of ethylene, propylene and other olefins. With major
positions in top U.S. supply basins, Williams Partners owns and
operates more than 33,000 miles of pipelines system wide –
including the nation’s largest volume and fastest growing pipeline
– providing natural gas for clean-power generation, heating and
industrial use. Williams Partners’ operations touch approximately
30 percent of U.S. natural gas. www.williams.com
About Williams Partners
Williams Partners (NYSE: WPZ) is an industry-leading, large-cap
natural gas infrastructure master limited partnership with a strong
growth outlook and major positions in key U.S. supply basins.
Williams Partners has operations across the natural gas value chain
from gathering, processing and interstate transportation of natural
gas and natural gas liquids to petchem production of ethylene,
propylene and other olefins. Williams Partners owns and operates
more than 33,000 miles of pipelines system wide – including the
nation’s largest volume and fastest growing pipeline – providing
natural gas for clean-power generation, heating and industrial use.
Williams Partners’ operations touch approximately 30 percent of
U.S. natural gas. Tulsa, Okla.-based Williams (NYSE: WMB), a
premier provider of large-scale U.S. natural gas infrastructure,
owns 60 percent of Williams Partners, including all of the 2
percent general-partner interest. www.williams.com
Portions of this document may constitute “forward-looking
statements” as defined by federal law. Although the company
believes any such statements are based on reasonable assumptions,
there is no assurance that actual outcomes will not be materially
different. Any such statements are made in reliance on the “safe
harbor” protections provided under the Private Securities Reform
Act of 1995. Additional information about issues that could lead to
material changes in performance is contained in the company’s
annual and quarterly reports filed with the Securities and Exchange
Commission.
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version on businesswire.com: http://www.businesswire.com/news/home/20160923005589/en/
WilliamsMedia Contact:Keith Isbell,
918-573-7308orInvestor Contacts:John Porter,
918-573-0797orBrett Krieg, 918-573-4614
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