One more hoop to jump through
Enbridge Inc - News Release
Enbridge to sell retail energy services business
Enbridge Inc
ENB
Shares issued 161,929,531
Jan 25 2002 close $42.070
Monday Jan 28 2002
News Release
Mr. Jim Rennie reports
ENBRIDGE SELLS RETAIL ENERGY SERVICES BUSINESS FOR $1
BILLION
Enbridge has agreed to sell its retail energy services business to Centrica North
America, a division of Centrica PLC, an energy services firm based in the United
Kingdom, for $1-billion in cash. The sale involves the retail energy products and
services businesses of Enbridge, including an estimated 1.3 million water heater
rental units and 14 retail outlets in Southern Ontario, the company's energy
services operations in Philadelphia, some parts of the Enbridge Services business
in British Columbia and more than 1,400 employees.
Enbridge will record a net gain on the sale of energy services of approximately
$210-million, after taxes and other costs, upon completion of the transaction. The
net proceeds from the sale will be used for strategic growth and debt reduction.
Patrick D. Daniel, Enbridge president and chief executive officer, said: "The sale
of the retail energy services business is in keeping with our strategy to focus on our
core asset management businesses. Although energy services continues to offer
potential for growth, redeployment of these funds into liquids pipelines, gas
distribution or gas transmission opportunities that allow us to increase our North
American footprint makes more sense for our shareholders. The sale proceeds
reflect the value Enbridge has created in growing this business in a deregulated
environment."
Mr. Daniel added: "The sale also increases our flexibility to capitalize on
infrastructure growth opportunities. Our plans are to invest roughly $5-billion in
capital over the next five years. And although we have a large and growing base of
operating cash flow, the sale of non-strategic assets is an effective way of financing
opportunities that we think will high grade our asset base and profitability. We are
also confident that Centrica will continue the record of care and service to which
our customers are accustomed."
"The acquisition is an important step in Centrica's goal of becoming the leading
provider of energy and energy-related products in North America," said Deryk
King, chief executive officer of Centrica North America. "Through this transaction
we will be able to augment and enhance our already significant presence in
Toronto, which is the hub for all our North American customers."
The bulk of the retail energy services business was unbundled from Enbridge
Consumers Gas, Canada's largest natural gas distribution utility, in 1999. Since
that time, Enbridge has increased the value of the franchise and responded to
customers' energy services needs in Southern Ontario.
Enbridge retains all rights to the Enbridge brand, and Enbridge Consumers Gas, its
operations and customer base will continue to be owned by Enbridge Inc.
Enbridge will also retain its customer support businesses, through its interest in
CustomerWorks Limited Partnership. Centrica has agreed to use the services of
CustomerWorks for a period of four years.
The sale is subject to Investment Canada and Competition Bureau approval and is
expected to close in the second quarter of 2002.
The more than 1,400 Enbridge home and business services employees will
continue to be employed by Centrica. "We thank all of them for their hard work,"
said Mr. Daniel, "and wish them continued success under the new ownership."
WARNING: The company relies upon litigation protection for "forward-looking"
statements. |
