TC Energy Corporation shareholders have voted to approve the spinoff of the Company’s Liquids Pipelines business and elected TC Energy’s Board of Directors at its 2024 annual and special meeting of shareholders.
TC Energy shareholders voted in favour of the Arrangement Resolution, pursuant to which, among other things, TC Energy shareholders will receive one new common share of TC Energy and 0.2 of a common share in a new public company named South Bow Corporation, in exchange for each common share of TC Energy held.
‘Today, our shareholders have affirmed their support of our Board and management team’s vision for the futures of TC Energy and South Bow,’ says François Poirier, president and CEO of TC Energy. ‘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.’
This critical vote enables TC Energy and South Bow to continue moving forward with their anticipated separation, which is expected to occur in late-third quarter to mid-fourth quarter of 2024. TC Energy’s Board of Directors and management team are confident the proposed separation will enhance long-term value for TC Energy shareholders by creating two independent, investment-grade, publicly listed companies. Each company will be structured to reflect differentiated value propositions and the ability to pursue and achieve greater success than a combined entity by executing tailored strategies targeted to distinct customer sets.
South Bow will be a low-risk, liquids transportation and storage business focused on enhancing the value of its unrivalled asset base. As a standalone entity with a distinct capital allocation strategy, South Bow will have greater flexibility to invest in strategic opportunities to expand, extend and unlock the full potential of its competitive corridor connecting WCSB crude oil to the U.S. Midwest and Gulf Coast. South Bow is expected to obtain an investment-grade credit rating. As a result, it will have the agility needed to quickly respond to market shifts, while delivering value to shareholders in the form of a compelling dividend and enhanced capital allocation optionality.
‘I thank our shareholders for supporting South Bow’s progress in becoming a standalone company,’ says Bevin Wirzba, Intended President and Chief Executive Officer of South Bow. ‘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.’
The spinoff has received the requisite tax rulings in Canada and the US and remains subject to receipt of necessary regulatory and court approvals and satisfaction of other customary closing conditions.
