All financial figures are in Canadian dollars unless noted otherwise
CALGARY, Alberta, April 02, 2019 (GLOBE NEWSWIRE) — Gibson Energy Inc. (“Gibson” or the “Company”), (TSX: GEI), announced today the sale of its Canadian Truck Transportation business for aggregate proceeds of approximately $100 million prior to closing adjustments and contingent bonus payments to Gibson. With the sale of the Canadian Truck Transportation business, Gibson has successfully completed all of the non-core divestitures announced at its January 2018 Investor Day for total proceeds of approximately $325 million. The Company also notes that DBRS Limited (“DBRS”) has assigned Gibson an Issuer Rating of “BBB (low)” with a “Stable” trend.
“We are pleased to announce the sale of Canadian Truck Transportation, concluding our non-core disposition process for total proceeds in-line with our initial expectations,” said Steve Spaulding, President and Chief Executive Officer. “Through these divestitures, we have focused our business around our core energy infrastructure assets, significantly high-graded our quality of cash flows and have ensured that we are fully-funded for all growth projects currently under construction. Each of these factors, as part of the continued execution of our strategy, has enabled Gibson to reach an important milestone with the Company’s first Investment Grade rating.”
Sale of Canadian Truck Transportation
As part of the divestiture, Gibson has entered into a definitive agreement (the “Truck Transportation Agreement”) with Trimac Transportation (“Trimac”) for the sale of substantially all the assets of its Canadian Truck Transportation business for proceeds of approximately $70 million, with the potential for additional proceeds depending on the performance of the business over the next four years. In addition, Gibson has entered into an agreement (the “Asset Purchase Agreement”) with an entity affiliated with Trimac for the sale of a field office and shop facilities situated on 31 acres of land in Edmonton, Alberta, for $30 million.
Closing of the Truck Transportation Agreement is expected to occur in mid-2019, subject to the receipt of all necessary approvals and satisfaction of certain conditions. Closing of the Asset Purchase Agreement is expected to occur in the second half of 2019 subject to the satisfaction of certain conditions. Following the closing of the divestiture, Gibson’s continuing businesses will retain access to safe and reliable truck transportation services at competitive rates through a long-term agreement with Trimac.
Investment Grade Credit Rating
DBRS announced on April 1, 2019 that it had assigned to the Company an Issuer Rating of “BBB (low)” with a “Stable” trend. DBRS also assigned the same rating and trend to the Company’s Senior Unsecured Notes. According to DBRS, the ratings are underpinned by high-quality contracted cash flows from the Company’s (1) infrastructure assets, primarily comprising crude oil-storage terminals; (2) strong competitive position; and (3) improved business and financial risk profile following the disposal of its non-contracted assets in 2017–2018.
Investor Day Details
Gibson is hosting an Investor Day on the morning of April 2, 2019 in Toronto, during which members of the senior executive team will provide a discussion of the Company’s strategy, its operations, recent developments and future opportunities.
The Investor Day will be webcast beginning at 8:45am Eastern Time (6:45am Mountain Time) and will be available through Gibson’s website www.gibsonenergy.com or may be accessed directly at the following URL:
Gibson is a Canadian-based oil infrastructure company with its principal businesses consisting of the storage, optimization, processing, and gathering of crude oil and refined products. Headquartered in Calgary, Alberta, the Company’s operations are focused around its core terminal assets located at Hardisty and Edmonton, Alberta, and also include the Moose Jaw Facility and an infrastructure position in the U.S.
Gibson shares trade under the symbol GEI and are listed on the Toronto Stock Exchange. For more information, visit www.gibsonenergy.com.