TC Energy has announced that its shareholders have approved the spin-off of its Liquids Pipelines business into a new entity, South Bow Corporation.
The shareholders voted in favour of the Arrangement Resolution, which will see them receive one new common share of TC Energy and 0.2 of a common share in South Bow for each common share of TC Energy held.
This strategic move is expected to occur between late-third quarter (Q3) and mid-Q4 2024.
TC Energy president and CEO François Poirier said: “This is an important milestone as we continue to move forward with our plan to separate into two highly focused, premier energy infrastructure companies.
“Through this separation, both companies will continue to deliver shareholder value in the form of compelling dividends, while focusing on meeting the growing demand for all forms of secure, affordable and sustainable energy in North America and around the globe.”
TC Energy approved its plan to spin off its Liquids Pipelines business in 2023.
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By GlobalDataTC Energy’s board of directors and management team believe this separation will enhance long-term value for shareholders by creating two independent, publicly listed companies.
The move is part of TC Energy’s strategy to slash its debt and shift focus towards its natural gas operations, reported Reuters.
The spin-off has secured the necessary tax rulings in both Canada and the US.
However, it is still subject to the receipt of regulatory and court approvals, along with other customary closing conditions.
South Bow intended president and CEO Bevin Wirzba said: “With our strategic franchise corridor, South Bow is positioned to deliver a compelling shareholder return through a sustainable dividend, steady growth outlook and paying down debt.”
South Bow Corporation will inherit approximately 4,900km of liquids pipelines, reported Reuters.
These assets connect oil supply from Alberta and parts of the US to refining markets in Illinois, Oklahoma and Texas.
South Bow’s key asset is the Keystone pipeline project, which has a capacity of 622,000 barrels per day.
