CALGARY - TC Energy (NYSE:TRP) Corporation (TSX, NYSE: TRP) and its partner, Northern New England Investment Company, Inc., a subsidiary of Énergir L.P., announced today the completion of the sale of Portland Natural Gas Transmission System (PNGTS) for a gross purchase price of US$1.14 billion. The transaction includes the assumption of US$250 million in outstanding Senior Notes by the buyers.
The sale is part of TC Energy's strategic plan to reach a $3 billion asset divestiture target for 2024. The proceeds from the sale, approximately $750 million net to TC Energy, will contribute to the company's efforts to strengthen its balance sheet and achieve its debt-to-EBITDA ratio goal of 4.75 times by the end of the year.
TC Energy's President and CEO, François Poirier, stated that the sale marks a step closer to the company's financial objectives. The cash proceeds will be distributed proportionally between TC Energy, holding a 61.7% interest in PNGTS, and Énergir, holding a 38.3% interest.
In addition to the financial aspects, TC Energy is committed to providing customary transition services to ensure a safe and orderly transfer of the natural gas system.
TC Energy, with over 7,000 employees, focuses on safely delivering energy solutions in North America, including reducing emissions and innovating in the natural gas market. The company's shares are publicly traded on the Toronto and New York stock exchanges.
The information in this article is based on a press release statement.
In other recent news, TC Energy has reported a 9% year-over-year increase in comparable EBITDA for the second quarter of 2024. The company has also made significant progress with its strategic initiatives, notably the shareholder approval of the South Bow spinoff and a landmark Indigenous Equity Ownership agreement in Canada. These developments are set against a backdrop of increasing natural gas demand, with TC Energy well-positioned to meet this surge with strategic assets across North America.
The company is on track to introduce approximately $7 billion in assets in 2024 and $9 billion in 2025. Indigenous communities are also set to own significant stakes in the NGTL and Foothill Systems. TC Energy has set its 2024 comparable EBITDA target between $11.2 billion and $11.5 billion, indicating a strong outlook.
In addition to these developments, TC Energy plans to close the South Bow spinoff in early Q4 2024. The company has declared a third-quarter dividend of $0.96 per common share. However, earnings per common share are projected to be lower due to ongoing asset divestiture.
Lastly, TC Energy is exploring opportunities in the data center industry, with a significant number of data centers being constructed near the company's pipelines. This, along with strong demand for the company's storage assets, suggests potential for future growth. These are the recent developments at TC Energy.
InvestingPro Insights
In light of TC Energy Corporation's recent divestiture of the Portland Natural Gas Transmission System (PNGTS), several metrics and insights from InvestingPro provide a deeper understanding of the company's financial health and market position. As of the last twelve months leading up to Q2 2024, TC Energy boasts a solid market capitalization of $45.46 billion, underscoring its significant presence in the energy sector.
The company's commitment to shareholder returns is evident through its impressive track record of raising its dividend for 23 consecutive years, a testament to its financial resilience and strategic planning. This is further supported by a robust dividend yield of 6.41%, which is particularly attractive to income-focused investors. Additionally, the company's price is hovering near its 52-week high, currently trading at 99.57% of this peak, which may suggest investor confidence in its operations and future outlook.
On the operational front, TC Energy's revenue growth has been positive, with an 8.89% increase over the last twelve months as of Q2 2024. This growth, coupled with a high operating income margin of 41.69%, indicates efficient management and the potential for sustainable profitability.
For those seeking further insights and analysis, InvestingPro offers additional tips on TC Energy Corporation, which can be accessed at https://www.investing.com/pro/TRP. Among these, analysts have revised their earnings upwards for the upcoming period, signaling potential optimism regarding the company's financial performance. Moreover, with a total of 11 InvestingPro Tips available, investors can gain a comprehensive understanding of the company's prospects and investment potential.
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