Kinder Morgan Inc. sold the entire roughly 5% equity stake in Pembina Pipeline Corp. it had received as part of Pembina’s recent purchase of Kinder Morgan Canada.
The $764 million of net proceeds from the sale will be used to pay down debt, the Houston-based company said Jan. 9.
In August, Calgary, Alberta-based Pembina agreed to Kinder Morgan’s Canadian affiliate in exchange for roughly 25 million Pembina shares, which were estimated to be worth about $935 million in pre-tax proceeds, per a company news release dated Aug. 21, 2019.
In conjunction, Kinder Morgan also sold its ownership of the U.S. portion of the Cochin Pipeline to Pembina for about $1.5 billion.
“This exit comes sooner than expected pointing to a single buyer of the position with net proceeds to [Kinder Morgan] of $764 million equating to TPH estimates of about $910 million pre-tax, or a marginal discount (2%-4%) to the trading range since Dec. 16 closing,” analysts with Tudor, Pickering, Holt & Co. wrote in a Jan. 10 research note.
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