As previously disclosed on May 26, 2022, AltaGas announced an agreement to sell its Alaskan Utilities to TriSummit for US$800 million (approximately CAD$1.1 billion), subject to customary closing conditions, including State regulatory approvals. The RCA approval was the last remaining material regulatory closing condition to be satisfied in connection with the Divestiture. The Divestiture remains subject to other customary closing conditions and is expected to close during the first quarter of 2023.
The sale will include AltaGas’ 100% interest in ENSTAR Natural Gas, the largest local gas distribution company in Alaska with approximately 150,000 customers; the Alaska Pipeline Company, which operates transmission and distribution pipelines for ENSTAR; the Company’s 65% indirect interest in Cook Inlet Natural Gas Storage Alaska (“CINGSA”), which is the only commercial state-regulated natural gas storage facility; and other ancillary unregulated operations. ENSTAR and CINGSA will continue to operate as standalone utilities and remain headquartered in Alaska with all ENSTAR employees joining TriSummit concurrent with closing.
AltaGas remains steadfast in the Company’s capital allocation framework, including balancing AltaGas’ desire to fund its strong long-term growth opportunities, reduce leverage ratios over the medium- to- long-term, and increase returns of capital to shareholders through steady and consistent dividend growth. The Alaskan sale, which represented 2.3x 2021 rate base and 29x 2021 allowed earnings, is a continuation of this emphasis and the capital recycling focus that has been part of AltaGas’ DNA in recent years. This strategy provides AltaGas the ability to successfully reduce debt while simultaneously fund growth through investments in our Utilities and across our industry-leading Global Exports and Midstream platform. AltaGas’ total near-term deleveraging from the Alaskan monetization is estimated to exceed CAD$1 billion, net of expected cash taxes. Sale proceeds will initially be used to reduce debt while providing AltaGas with the financial flexibility to advance the Company’s strong growth opportunities across the Utilities and Midstream platforms over the coming years.
The expected closing date is aligned with AltaGas’ expectations and is embedded within the Company’s 2023 guidance expectations of Normalized EPS guidance of $1.85 – $2.05 and 2023 Normalized EBITDA guidance of $1.5 billion – $1.6 billion.