TC Energy Corporation (NYSE:TRP) (TSE:TRP) is set to strengthen its balance sheet by selling a 40% interest in its Columbia Gas Transmission and Columbia Gulf Transmission systems to Global Infrastructure Partners (GIP). The move is expected to rake in C$5.2 billion in cash, which is about a 10.5x multiple of TC Energy’s 2023 outlook EBITDA, and it’s a big stride forward in the company’s plans to deleverage in 2023. Nonetheless, TRP stock finished 2.57% lower today.
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The deal sees TC Energy and GIP teaming up to jointly fund the annual upkeep, modernization, and expansion of these systems. These capital expenditures are expected to amount to more than C$1.3 billion each year for the next three years.
The transaction, expected to conclude in the fourth quarter of 2023, will also entail a recapitalization and debt restructuring of the newly-formed entities.
Is TRP Stock a Buy, According to Analysts?
According to analysts, TRP stock comes in as a Hold based on three Buys, three Holds, and three Sells assigned in the past three months. The average TRP stock price target of C$62.02 implies 21.9% upside potential.
