| Add to balance / Manage account | User: | Log out |
| Prospect News home > News index > List of issuers E > Headlines for EnCana Corp. > News item |
EnCana to divide into separate gas, oil companies by end of November
By Lisa Kerner
Charlotte, N.C., Sept. 11 - EnCana Corp.'s board of directors approved a plan to split the company into two publicly traded companies - EnCana (GasCo), a natural gas company, and Cenovus Energy Inc., an integrated oil company.
The transaction, to be completed through a plan of arrangement under Canadian law, is expected to close Nov. 30 subject to shareholder approval on Nov. 25.
According to EnCana, it first proposed the reorganization in May 2008 and revised the plan in October 2008 due to turmoil in the financial markets.
The plan calls for EnCana common shareholders to retain their EnCana shares and receive one Cenovus common share for each EnCana share held.
David O'Brien will be chairman of the board of EnCana (GasCo). Current EnCana president and chief executive officer Randy Eresman will retain those roles at EnCana (GasCo).
Michael Grandin will be chairman of the Cenovus board while EnCana executive vice president and chief financial officer Brian Ferguson will become president and CEO of Cenovus.
EnCana said the initial combined dividends of the two companies will be approximately equal to EnCana's current dividend of $1.60 per share annually.
Cenovus and EnCana (GasCo) are both targeting a debt-to-capitalization ratio of less than 40% and a debt-to-adjusted EBITDA of less than 2.0 times.
At June 30, EnCana's debt was about $8.9 billion, debt-to-capitalization ratio was 27% and debt-to-adjusted EBITDA, on a trailing 12-month basis, was 0.7 times, a company news release said.
RBC Capital Markets Corp. committed $3 billion in bridge financing to partially fund Cenovus' purchase of its assets from EnCana.
EnCana, a Calgary, Alta., oil and natural gas company, was advised by Bank of America Merrill Lynch and RBC Capital Markets. CIBC World Markets offered a fairness opinion to EnCana's board.
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.