CALGARY, Alberta - TC Energy (NYSE:TRP) Corporation (TSX, NYSE: TRP) announced today that its shareholders have given the green light to the spinoff of its Liquids Pipelines business into a new entity, South Bow Corporation. The decision was made during the company's 2024 annual and special meeting of shareholders, where a Board of Directors was also elected.
Shareholders approved the Arrangement Resolution, allowing them to receive one TC Energy common share and 0.2 of a common share in South Bow for each TC Energy share held. This move is part of TC Energy's strategy to create two focused energy infrastructure companies.
François Poirier, President and CEO of TC Energy, expressed gratitude for the shareholder endorsement, viewing it as a significant step in the company's evolution. Bevin Wirzba, who is set to become the President and CEO of South Bow, highlighted the company's potential for a sustainable dividend and growth.
The split is expected to occur between late third quarter and mid-fourth quarter of 2024, subject to necessary regulatory and court approvals. The demerger has already received the required tax rulings in Canada and the U.S.
The newly elected Board of Directors for TC Energy includes Cheryl F. Campbell, Michael R. Culbert, and other members, all of whom received substantial support from shareholders. Final voting results will be available on the SEDAR+ and EDGAR databases, as well as TC Energy's website by June 5, 2024.
TC Energy is known for its solutions in energy transportation, generation, and storage across North America. Its shares are publicly traded on the Toronto and New York stock exchanges.
InvestingPro Insights
As TC Energy Corporation (TSX, NYSE: TRP) prepares to embark on a transformative spinoff of its Liquids Pipelines business, the company's financial health and shareholder value continue to be focal points for investors. According to the latest data from InvestingPro, TC Energy boasts a robust market capitalization of $40.06 billion, reflecting the scale and stability of its operations in the energy infrastructure sector.
The company's commitment to shareholder returns is evidenced by its impressive track record of raising dividends for 23 consecutive years, with a noteworthy dividend yield of 7.34% as of the latest data. This dedication to consistent dividend growth aligns with the positive outlook expressed by CEO François Poirier and the anticipated sustainable dividend from the newly formed South Bow entity.
InvestingPro Tips suggest that while TC Energy operates with a significant debt burden, the company's stock generally trades with low price volatility, offering a sense of reliability for investors. Moreover, TC Energy's P/E ratio stands at a reasonable 19.89, with an adjusted P/E ratio for the last twelve months as of Q1 2024 at an even more attractive 13.12, indicating potential value relative to near-term earnings growth.
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