Inter Pipeline Fund to Sell Valley Pipeline System for $28 Million
CALGARY, ALBERTA--(Marketwire - March 30, 2009) - Inter Pipeline Fund ("Inter Pipeline") (TSX:IPL.UN) announced today that it has entered into an agreement to sell its Valley Pipeline system to an undisclosed party for $28 million subject to closing adjustments.
The Valley Pipeline is a 200 kilometer condensate delivery system located west of Calgary, Alberta. It forms part of a regional network of condensate gathering pipelines and interconnecting transmission systems that transport condensate from natural gas processing plants in southern Alberta to the petroleum market hub at Edmonton, Alberta. In 2008, the Valley Pipeline transported 2,700 barrels per day of condensate.
Inter Pipeline has targeted the Valley Pipeline system for divestiture due to its small size, maturity and lack of synergies with other operations.
David Fesyk, Inter Pipeline's President and Chief Executive Officer, commented "Valley is a non-core asset with very limited strategic value to us. Throughputs represent less than 1% of the combined volumes transported on Inter Pipeline's systems in Canada and it generates less than 1% of our annual cash flow."
The transaction price represents a 19 times multiple to EBITDA produced by the Valley Pipeline system in 2008. Proceeds from the sale will be used to reduce Inter Pipeline's bank indebtedness.
The transaction is subject to certain closing conditions and regulatory approvals, and is expected to close in the second quarter of 2009. The transaction has been approved by Inter Pipeline's Board of Directors.
Inter Pipeline Fund
Inter Pipeline is a major petroleum transportation, bulk liquid storage and natural gas liquids extraction business based in Calgary, Alberta, Canada. Structured as a publicly traded limited partnership, Inter Pipeline owns and operates energy infrastructure assets in western Canada, the United Kingdom, Germany and Ireland. Additional information about Inter Pipeline can be found at www.interpipelinefund.com.
Inter Pipeline is a member of the S&P/TSX Composite Index. Class A Units trade on the Toronto Stock Exchange under the symbol IPL.UN.
Only persons who are residents of Canada, or if partnerships, are Canadian partnerships, in each case for purposes of the Income Tax Act (Canada) are entitled to purchase and own Class A Units of Inter Pipeline.
Certain information set forth above may contain forward-looking statements that involve risks and uncertainties. Readers are cautioned not to place undue reliance on forward-looking statements. Such information, although considered reasonable by the General Partner of Inter Pipeline at the time of preparation, may later prove to be incorrect and actual results may differ materially from those anticipated in the statements made. For this purpose, any statements that are not statements of historical fact may be deemed to be forward-looking statements.
Forward-looking statements often contain terms such as "may", "will", "should", "anticipate", "expects" and similar expressions. Such risks and uncertainties include, but are not limited to, risks associated with operations, such as loss of markets, regulatory matters, environmental risks, industry competition and the ability to access sufficient capital from internal and external sources. You can find a discussion of those risks and uncertainties in Inter Pipeline's securities filings at www.sedar.com. Except to the extent required by applicable securities laws and regulations, Inter Pipeline assumes no obligation to update or revise forward-looking statements made herein or otherwise, whether as a result of new information, future events, or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary note.
All dollar values are expressed in Canadian dollars unless otherwise noted.
Non-GAAP Financial Measures
Certain financial measures referred to in this news release, namely "cash flow" and "EBITDA", are not measures recognized by GAAP. These non-GAAP financial measures do not have standardized meanings prescribed by GAAP and therefore may not be comparable to similar measures presented by other entities. Investors are cautioned that these non-GAAP financial measures should not be construed as alternatives to other measures of financial performance calculated in accordance with GAAP.
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