• Generates pre-tax cash equity proceeds of approximately $740 million (US$545 million) net to TC Energy
• Transaction implies a valuation multiple of approximately 11.0 times 2023 comparable EBITDA
• Progresses toward $3 billion asset divestiture and 4.75 times debt-to-EBITDA targets in 2024

TC Energy Corporation and its partner Northern New England Investment Company, Inc., a subsidiary of Énergir L.P. (Énergir), have entered into a purchase and sale agreement to sell Portland Natural Gas Transmission System (PNGTS) to BlackRock, through a fund managed by its Diversified Infrastructure business, and investment funds managed by Morgan Stanley Infrastructure Partners (the Buyer), for a gross purchase price of US$1.14 billion, which includes the assumption of US$250 million of outstanding Senior Notes held at PNGTS. This transaction implies a valuation of approximately 11.0 times reported 2023 comparable EBITDA.

“Today’s announcement represents continued progress toward achieving our 2024 strategic priority of enhancing our balance sheet strength by delivering approximately $3 billion in asset divestitures. We are committed to reaching our 4.75 times debt-to-EBITDA upper limit by year-end and expect to have further asset divestiture announcements through the year,” said François Poirier, TC Energy’s President and Chief Executive Officer. “This sale of a non-core asset at a strong valuation is a unique opportunity to support our capital rotation and deleveraging priorities while continuing to meet the needs of the communities PNGTS serves.”

The cash proceeds will be split pro-rata according to the current PNGTS ownership interests (TC Energy 61.7 per cent, Énergir 38.3 per cent) and will be paid at closing, subject to certain customary adjustments. As part of the transaction, the Buyer will assume the outstanding Senior Notes held at PNGTS and currently consolidated on TC Energy’s balance sheet. The transaction is expected to close in mid-2024, subject to the receipt of regulatory approvals and customary closing conditions.

PNGTS is a 475-kilometer (295-mile) FERC-regulated transporter of natural gas serving the upper New England and Atlantic Canada markets. The pipeline receives natural gas from the Trans Quebec and Maritimes (TQM) Pipeline via the Canadian Mainline. TC Energy will provide customary transition services and will work jointly with the Buyer to ensure the safe and orderly transition of this critical natural gas system.

Related Article: BlackRock Expands Proxy Voting Access for U.S. Retail Investors with $2.6 Trillion AUM

TC Energy’s focus for 2024 remains clear. The company will continue maximizing the value of its assets through safety and operational excellence, delivering its secured capital program on time and on budget, and enhancing its balance sheet strength and financial flexibility through asset divestitures and streamlining its business through efficiency efforts. TC Energy’s 2024 financial guidance and growth outlook through 2026 remain unchanged as a result of this announcement.

Barclays acted as exclusive financial advisor to TC Energy and Énergir on the transaction. Bracewell LLP acted as legal advisor to TC Energy.