Emera to sell Maine utility for $1.3B, completing 3-year fundraising plan
- Emera announced yesterday it will sell its regulated Maine electric utility operations to ENMAX for $959 million, part of a three-year funding plan to reduce corporate debt. The company previously announced it would sell its New England gas generation portfolio.
- ENMAX is executing its own strategy to expand through the acquisition of regulated utility operations in North America. The Maine operations add about $672 million in regulated rate base assets to its portfolio, according to the company.
- Emera Maine serves about 159,000 customers in the northern part of the state. The deal will require state and federal approvals and the companies expect it to close later this year.
Emera made its first acquisition in Maine almost 20 years ago and says the investments have fueled consistent growth. But it's now selling its regulated electric assets in the state to reach its corporate debt reduction goals and fund capital expenditures.
Emera purchased Bangor Hydro in 2001 and then Maine Public Service in 2010, merging the two utilities into Emera Maine.
"Our Maine investments have delivered consistent financial results over the past 18 years and have contributed greatly to Emera’s evolution into a North American energy leader," Emera President and CEO Scott Balfour said in a statement.
But once the deal is completed, Emera says it will have raised sufficient funds to close out its three-year plan.
"Proceeds raised through select asset sales will give us greater financial flexibility as we fund our continued growth," Balfour said, highlighting the company's progress on portfolio optimization.
Combined with the gas generation sale, Emera said it will have raised approximately $1.57 billion of equity proceeds which will be used to reduce debt and support a $4.85 billion three-year regulated capital program.
The deal will grow ENMAX'S regulated rate base by 50%, and the company estimates 70% of its future cash flows will be derived from regulated, non-commodity sources. ENNMAX said it will fund the acquisition through debt, and that inclusive of incremental transaction financing, the deal is expected to be immediately accretive to earnings and cash flow.
Regulators at the Maine Public Utilities Commission and Federal Energy Regulatory Commission will need to approve the deal.
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