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Veresen plans to decrease leverage ratios, implement capital program
By Devika Patel
Knoxville, Tenn., Dec. 5 – Veresen Inc. is targeting a range of 4x to 4.5x for its debt to EBITDA ratio and plans to implement a $500 million capital program without having to take on additional debt, the company told investors on Monday.
“We will increase and diversify our cash flows that underpin our dividend, decrease our leverage metrics and improve our ability to internally fund future organic growth,” president and chief executive officer Don L. Althoff said on the company’s conference call Monday announcing its outlook.
“Proceeds from the sale of our power business will allow us to fund our $500 million capital program in 2017 without seeing an increase in our leverage levels and actually seeing our absolute debt levels decrease,” senior vice president, finance and chief financial officer Theresa Jang said on the call.
“We expect that with all of our projects currently under construction are in service, our run rate EBITDA will increase by $135 to $160 million helping to further drive down our leverage metrics.
“With all our projects are in service, we anticipate being in the range of four to 4.5 times debt to EBITDA prior to the sanction of any additional capital,” Jang said.
Veresen said in a press release that it will remain fully funded, without having to sell equity or debt to finance its current projects under construction, which will support the company’s objective of growing distributable cash per share.
Veresen is a Calgary, Alta.-based publicly traded dividend-paying corporation that owns and operates energy infrastructure assets, including pipeline transportation services.
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