TC Energy Explores Asset Sales Worth $10B, Debt Reduction on the Horizon

TransCanada Corporation -0.28%

TransCanada Corporation

TRP

39.76

-0.28%

Pipeline and transportation company TC Energy Corp (NYSE:TRP) is reportedly exploring selling a minority stake in ANR Pipeline Co for an estimated enterprise value of around $3 billion. 

Additionally, TC Energy is contemplating the sale of a portion of its Mexican operation, which generates roughly $600 million in annual EBITDA.

Furthermore, the company is mulling over the sale of a controlling stake in the Portland Natural Gas Transmission System and a significant minority stake in the Millennium Pipeline, both boasting enterprise values surpassing $1 billion. 

Collectively, these assets are valued at approximately $10 billion, although any stake sales would represent only a fraction of this total.

The final decisions have not yet been reached, and TC Energy may choose to retain some or all of these assets. 

Under the leadership of President and CEO Francois Poirier, TC Energy is undergoing a significant transformation, Bloomberg reported. 

In July, the company unveiled plans to spin off its Liquids Pipelines business and partially sell its Columbia Gas Transmission and Columbia Gulf Transmission businesses to Global Infrastructure Partners, a deal valued at $5.2 billion

Company executives also disclosed that an additional $3 billion in divestitures over the next 18 months would be required to meet the company's debt ratio target of 4.75 times EBITDA by the end of 2024.

This strategic move to explore asset sales aligns with a trend in the industry this year, as pipeline companies aim to capitalize on rising free cash flow following the pandemic. 

Price Action: TRP shares closed at $33.83 on Friday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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