Acquisition Advances Global Exports Strategy and Focus on
Connecting Customers and Markets while Reducing Asian Carbon
Intensity; Expected to be Immediately Accretive to Earnings Per
Share
CALGARY,
AB, July 5, 2022 /CNW/ - AltaGas Ltd.
("AltaGas" or the "Company") (TSX: ALA) is pleased to
announce the purchase of 25.97% equity ownership of Petrogas Energy
Corp. ("Petrogas") from Idemitsu Canada Corporation, a wholly owned
subsidiary of Idemitsu Kosan Co., Ltd. ("Idemitsu"), for total cash
considerations of C$285 million. The
closing and effective date of the transaction is July 5, 2022, with AltaGas now owning 100% of
Petrogas.
The transaction was principally funded with recycled capital
from the recent sale of AltaGas' non-operated interest in the
Aitken Creek gas processing facility, as well as modest draws of
short-term debt from the Company's existing credit facilities,
which have approximately $3 billion
of estimated liquidity. AltaGas plans to later repay the modest
draws on its credit facilities through the strong free cash flow
growth from the asset base. The transaction is expected to be
immediately accretive to normalized EPS through a reduction in net
income applicable to non-controlling interests, with full-year
run-rate accretion expected to be in excess of $0.10 per share. Following the transaction,
Idemitsu will continue to represent an important partnership for
AltaGas as a Global Exports offtake customer through the Astomos
Energy Joint Venture. AltaGas and Idemitsu will also continue to
evaluate future opportunities and collaborate on prospective energy
transition projects as both organizations pursue various
lower-carbon initiatives over the long-term.
"We are excited to take full ownership of Petrogas," said
Randy Crawford, President and Chief
Executive Officer of AltaGas. "This transaction provides us the
ability to further integrate and optimize our industry leading west
coast export platform, solidifying our position as the leading
provider of North American Liquified Petroleum Gases (LPGs) from
the west coast. The transaction clearly demonstrates our ability to
recycle capital into strategic growth opportunities and ensures
that AltaGas is well-positioned to connect domestic customers with
global markets in the most efficient manner. We will continue to
develop the Petrogas assets and leverage its port and tidewater
access to meet our domestic customers with global customers' needs,
including various energy transition opportunities that are aligned
with North America and
Asia's long-term lower-carbon
focus."
The Petrogas acquisition, along with the planned sale of
AltaGas' Alaska Utilities that was announced in late May, is
representative of the Company's opportunistic capital recycling
strategy to achieve corporate objectives and create long-term value
for all stakeholders, as has been demonstrated over the past three
years. The underlying earnings profile of the Petrogas assets is
well-aligned with this objective and should deliver strong
long-term value to AltaGas' shareholders. AltaGas remains acutely
focused on balancing the Company's desire to advance its growth
opportunities while reducing leverage ratios over the medium- to-
long-term and increasing returns of capital to shareholders through
steady and consistent dividend growth. AltaGas' 2022 guidance
remains unchanged with full year earnings contribution from the
acquisition expected to be realized in 2023.
Burnet, Duckworth & Palmer LLP acted as legal counsel to
AltaGas on the transaction. McCarthy Tétrault LLP acted as legal
counsel and BMO Capital Markets acted as financial advisor to
Idemitsu on the transaction.
ABOUT ALTAGAS
AltaGas is a leading North American infrastructure company that
connects customers and markets to affordable and reliable sources
of energy. The Company operates a diversified, lower-risk,
high-growth Utilities and Midstream business that is focused on
delivering resilient and durable value for its stakeholders.
For more information visit www.altagas.ca or reach out to one of
the following:
Jon Morrison
Senior
Vice President, Investor Relations & Corporate Development
Jon.Morrison@altagas.ca
Adam McKnight
Director,
Investor Relations
Adam.McKnight@altagas.ca
Investor Inquiries
1-877-691-7199
investor.relations@altagas.ca
Media Inquiries
1-403-206-2841
media.relations@altagas.ca
FORWARD-LOOKING
INFORMATION
This news release contains forward-looking information
(forward-looking statements). Words such as "may", "can", "would",
"could", "should", "will", "intend", "plan", "anticipate",
"believe", "aim", "seek", "propose", "contemplate", "estimate",
"focus", "strive", "forecast", "expect", "project", "target",
"potential", "objective", "continue", "outlook", "vision",
"opportunity" and similar expressions suggesting future events or
future performance, as they relate to the Corporation or any
affiliate of the Corporation, are intended to identify
forward-looking statements. In particular, this news release
contains forward-looking statements with respect to, among other
things, business objectives, expected growth, results of
operations, performance, business projects and opportunities and
financial results. Specifically, such forward-looking
statements included in this document include, but are not limited
to, statements with respect to the following:; AltaGas' global
exports strategy; expected timing on repayment of credit
facilities; expected impact on AltaGas' EPS, net income and balance
sheet; reducing leverage ratios; future increases in returns of
capital and dividend growth; the planned sale of AltaGas' Alaskan
utilities business; future partnerships with Idemitsu; and
long-term lower carbon initiatives.
These statements involve known and unknown risks,
uncertainties and other factors that may cause actual results,
events and achievements to differ materially from those expressed
or implied by such statements. Such statements reflect AltaGas'
current expectations, estimates, and projections based on certain
material factors and assumptions at the time the statement was
made. Material assumptions include: assumptions regarding
asset sales anticipated to close in 2022/2023, effective tax rates,
the U.S./Canadian dollar exchange rate, the expected impact of the
COVID-19 pandemic, inflation, the performance of the businesses
underlying each sector, access to capital, timing and receipt of
regulatory approvals, acquisition and divestiture activities,
operational expenses, returns on investments, dividend levels, and
transaction costs.
AltaGas' forward-looking statements are subject to certain
risks and uncertainties which could cause results or events to
differ from current expectations, including, without limitation:
risk related to pandemics, epidemics or disease outbreaks,
including COVID-19; health and safety risks; operating risk;
natural gas supply risks; infrastructure; service interruptions;
cyber security, information, and control systems; climate-related
risks, including carbon pricing; regulatory risks; litigation risk;
changes in law; reputation risk; capital market and liquidity
risks; general economic conditions; internal credit risk; foreign
exchange risk; debt financing, refinancing, and debt service risk;
interest rates; counterparty and supplier risk; dependence on
certain partners; growth strategy risk; underinsured and uninsured
losses; impact of competition in AltaGas' businesses; counterparty
credit risk; market risk; composition risk; collateral; rep
agreements; variability of dividends; risk management costs and
limitations; and the other factors discussed under the heading
"Risk Factors" in the Corporation's Annual Information Form for the
year ended December 31, 2021 and set
out in AltaGas' other continuous disclosure documents.
Many factors could cause AltaGas' or any particular business
segment's actual results, performance or achievements to vary from
those described in this press release, including, without
limitation, those listed above and the assumptions upon which they
are based proving incorrect. These factors should not be construed
as exhaustive. Should one or more of these risks or uncertainties
materialize, or should assumptions underlying forward-looking
statements prove incorrect, actual results may vary materially from
those described in this news release as intended, planned,
anticipated, believed, sought, proposed, estimated, forecasted,
expected, projected or targeted and such forward-looking statements
included in this news release, should not be unduly relied upon.
The impact of any one assumption, risk, uncertainty, or other
factor on a particular forward-looking statement cannot be
determined with certainty because they are interdependent and
AltaGas' future decisions and actions will depend on management's
assessment of all information at the relevant time. Such statements
speak only as of the date of this news release. AltaGas does not
intend, and does not assume any obligation, to update these
forward-looking statements except as required by law. The
forward-looking statements contained in this news release are
expressly qualified by these cautionary statements.
Financial outlook information contained in this news release
about prospective financial performance, financial position, or
cash flows is based on assumptions about future events, including
economic conditions and proposed courses of action, based on
AltaGas management's (Management) assessment of the relevant
information currently available. Readers are cautioned that such
financial outlook information contained in this news release should
not be used for purposes other than for which it is disclosed
herein.
Additional information relating to AltaGas, including its
quarterly and annual MD&A and Consolidated Financial
Statements, AIF, and press releases are available through AltaGas'
website at www.altagas.ca or through SEDAR at www.sedar.com
SOURCE AltaGas Ltd.