Summary
Kinder Morgan, Inc. (KMI) filed an 8-K on September 5, 2018, detailing the consummation of a significant transaction involving its Canadian subsidiary, Kinder Morgan Canada Limited (KML). KMI, through its subsidiary Kinder Morgan Cochin ULC (KMCU), sold the Trans Mountain pipeline system and related assets, including the expansion project, to Her Majesty in Right of Canada for C$4.5 billion. This sale represents a strategic divestiture for KMI, removing substantial project risk and providing capital. The proceeds from this transaction are slated for use by KML, with KMI's board indicating an intention to vote in favor of KML's proposed plan for the proceeds, which is subject to KML shareholder approval. This filing marks a key step in KMI's deleveraging strategy and focus on its core U.S. midstream infrastructure assets.
Key Highlights
- 1KMI has completed the sale of its Trans Mountain pipeline system and related expansion project, along with the Puget Sound pipeline system and associated Canadian operations, to the Canadian government for C$4.5 billion.
- 2The transaction involved KMI's Canadian subsidiary, Kinder Morgan Canada Limited (KML), and its subsidiary Kinder Morgan Cochin ULC (KMCU).
- 3The sale was made to Her Majesty in Right of Canada, as represented by the Minister of Finance.
- 4KMI's board of directors intends to vote in favor of KML's proposed plan for the utilization of the transaction proceeds.
- 5The use of proceeds plan by KML is subject to approval by KML's shareholders under Canadian law.
- 6This divestiture is a significant strategic move, likely aimed at deleveraging KMI's balance sheet and focusing on its core U.S. midstream assets.
- 7The filing includes a press release from KMI regarding its voting intention for the KML board's proposals related to the proceeds.