Enbridge Income Fund Holdings Inc. (the company) and Enbridge Income Fund (the fund) have received a proposal from Enbridge Inc., pursuant to which Enbridge Inc. would transfer three renewable energy assets to the fund.
The proposal proposes to transfer the Ontario Wind, Sarnia Solar and Talbot wind projects for an aggregate price of C$1.3 billion, to be paid in part by the issuance of additional ordinary trust units of the fund to both the company and Enbridge Inc. on a pro rata basis in accordance with their present holdings in the fund.
Under the proposal, Enbridge Inc. would provide bridge debt financing to the fund for the balance of the price. Enbridge Inc. would also grant an option to the company to acquire some or all of the units to which Enbridge Inc. would be entitled to subscribe for. If exercised, the company's economic interest in the fund would increase.
It is expected that approximately C$180 million will be required by the company to subscribe for the units, which would increase by up to an additional C$70 million if the option granted by Enbridge Inc. is exercised in full. In the proposal, Enbridge Inc. estimates that, based on certain assumptions, the after-tax earnings and cashflow of the company may increase by approximately C$0.07 per share on a sustainable basis.
The company and the fund have formed a joint special committee of independent trustees and directors to review the proposal and make recommendations to the respective boards of the fund and the company.
