Pembina Pipeline Corporation (TSX: PPL.TO)(TSX: PPL-DBC.TO) (NYSE: PBA) and Provident Energy Ltd. announced that Pembina has completed its previously announced acquisition of Provident pursuant to a plan of arrangement under Section 193 of the Business Corporations Act (Alberta).
"Today marks a momentous occasion in Pembina's history," said Bob Michaleski, Pembina's Chief Executive Officer. "With the acquisition of Provident, we are well-poised to meet the increasing needs of our customers. Our combined team, together with our solid asset base and geographic reach, establishes Pembina as a leader in the North American energy infrastructure sector and gives us the ability to pursue larger, more complex growth projects to the benefit of all stakeholders."
Pursuant to the Arrangement, Pembina has acquired all of the issued and outstanding common shares of Provident in a transaction valued at approximately $3.8 billion. Provident shareholders received 0.425 of a Pembina share for each Provident share held. Pembina has assumed all of the rights and obligations of Provident relating to the 5.75% convertible unsecured subordinated debentures of Provident maturing December 31, 2017, and the 5.75% convertible unsecured subordinated debentures of Provident maturing December 31, 2018. Within 30 days, Pembina will make a repurchase offer for the Provident Debentures at 100 percent of their principal values plus accrued and unpaid interest.
Should a holder of Provident Debentures elect not to accept the repurchase offer, the debentures will remain outstanding and mature as originally set out in their respective indentures. The Provident Debentures will be listed on the Toronto Stock Exchange under the symbols PPL.DB.E and PPL.DB.F. Pursuant to the Arrangement, Provident amalgamated with a wholly-owned subsidiary of Pembina and will be continued under the name "Pembina NGL Corporation."
The Provident common shares are expected to be delisted from the TSX concurrent with the listing of the Pembina common shares issued pursuant to the Arrangement.
The Pembina common shares, including those issued under the Arrangement, will be listed and begin trading on the New York Stock Exchange under the symbol "PBA" today. The Provident common shares have been delisted from the NYSE.
As previously announced, Pembina is increasing its monthly dividend rate from $0.13 per share per month ($1.56 annualized) to $0.135 per share per month ($1.62 annualized), representing a 3.8 percent increase and reflecting management's confidence in the significant operational and financial strength of the combined entity going forward. This dividend increase will take effect for the dividend payable on May 15, 2012 to shareholders of record on April 25, 2012.
With this acquisition, Pembina has a substantially larger and more diversified portfolio of businesses across the energy value chain. Its assets are competitively located in key growth regions for natural gas liquids and crude oil including: Montney, Duvernay, Alberta Deep Basin, Pelican Lake heavy oil, Athabasca oil sands, Cardium, Swan Hills, Bakken, Marcellus and Utica.
Pembina estimates its capital spending plans for 2012 will total $700 million, with major near-term projects including the Saturn and Resthaven liquids extraction facilities; Peace NGL pipeline expansion; Redwater liquids storage development; and the Redwater fractionator capacity expansion. Pembina also plans to begin development of a new 65,000 barrel per day fractionator at its Redwater site to meet the growing need of NGL producers in the region. This new fractionator is anticipated to be in-service by mid 2014 pending continued customer support and subject to required regulatory and environmental approvals.
In connection with the closing of the Arrangement, Pembina's unsecured revolving credit facility with a syndicate of Canadian banking institutions was increased from $800 million to $1.5 billion for a term of five years. The Facility is available for general corporate purposes and to execute Pembina's growth strategy.
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