CALGARY — Innergex Renewable Energy Inc. will become the sole owner of five wind farms in the Gaspe Peninsula in Quebec under an agreement announced Thursday to buy out TransCanada Corp.’s 62 per cent interest for $630 million.
The acquisition of the Cartier wind farms and operating entities adds 366 megawatts of net installed capacity to Innergex’s portfolio and will help advance its growth prospects, said company CEO Michel Letellier in a news release.
“We have always considered Cartier Wind Farms as an integral part of our business and the transaction fits seamlessly with our growth strategy and allows us to expand in Quebec, the province where Innergex laid its roots.”
The Cartier facilities have a total generating capacity of 590 megawatts. Innergex said it intends to sell a stake in the wind farms to a new partner but will retain 100 per cent control of the operating companies.
Proceeds from the deal, expected to close late this year, will provide funding for TransCanada’s growth, said CEO Russ Girling on a conference call to discuss second-quarter results.
“That sale allows us to surface significant value for a mature asset that represented approximately five per cent of our generating capacity and redeploy that capital into our $28-billion capital program, thereby reducing our need for external capital including common equity,” he said.
Selling the wind farm stake represents a lower cost of capital than other alternatives, Girling added.
TransCanada said it will continue to be one of Canada’s largest private-sector power generators, producing enough power to meet the needs of more than six million homes, after the sale concludes.
Meanwhile, Girling said he welcomes news that the Nebraska Supreme Court will speed up a legal battle over the proposed route of the Keystone XL pipeline project through the state.
“We remain confident the public interest determination of the Nebraska Public Utilities Commission was lawful and expect the Nebraska Supreme Court could reach a decision by late 2018 or the first quarter of 2019,” he said.
He added the company has negotiated easement deals with landowners covering 62 per cent of the route and is continuing those talks.
The $8-billion, 1,897-kilometre pipeline would deliver oil from Canada to Texas Gulf Coast refineries.
TransCanada reported Thursday that second-quarter net income attributable to common shareholders amounted to $785 million, or 88 cents per share, down from $881 million, or $1.01 per share during the same period in 2017.
The most recent quarter included an $11 million after-tax loss related to the winding down of U.S. Northeast power marketing contracts.
Revenue totalled $3.2 billion, largely in line with last year.
Excluding that impact and adjusting for other items, earnings amounted to 86 cents per share, up from 76 cents per share in the year-ago quarter.
That beat analysts expectations for adjusted earnings of 75 cents per share, according to Thomson Reuters Eikon, as 2018 results included projects that recently entered service and the positive impact of U.S. tax reform.
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Companies in this article: (TSX: INE, TSX:TRP)
Dan Healing, The Canadian Press