Gibson Energy Inc. (“Gibson” or the “Company”) (TSX: GEI) announced
today it has entered into an agreement to acquire 100% of the
membership interests of South Texas Gateway Terminal LLC (“STLLC”)
for a total purchase price of US$1.1 billion in cash (the
“Transaction”), subject to closing adjustments. Through the
Transaction, Gibson acquires the South Texas Gateway Terminal
(“STGT” or the “Terminal”) which is positioned as one of the most
competitive liquids terminal and export facilities globally with
direct pipeline connections to low-cost, long reserve-life resource
supply, and very large crude carrier (“VLCC”) capabilities. The
Transaction implies a multiple of less than 9x the projected
forward Adjusted EBITDA and is immediately accretive, with DCF per
share accretion in the mid-teens4,5,6.
“Since establishing Gibson as a leading
liquids-focused infrastructure company, we have been looking for an
opportunity that is a strategic fit, while enhancing our scale and
diversity,” said Steve Spaulding, President and Chief Executive
Officer. “After much patience and discipline, I am excited to add
the world-class South Texas Gateway Terminal to our infrastructure
portfolio. This transaction amplifies our high-quality
infrastructure revenues and bolsters the continued growth of our
distributable cash flow per share. To add 1 mmbbl/d of export
capacity and nearly 9 million barrels of terminals storage in a
highly strategic location furthers our momentum in growing Gibson’s
infrastructure footprint and provides a platform for future growth
with existing and new customers.”
South Texas Gateway
Terminal
STGT is a newly built, high-quality crude oil
export facility, operating a deep-water, open access marine
terminal in Ingleside, Texas at the mouth of the Corpus Christi
Bay. The Terminal was officially placed in-service and loaded its
first vessel in July 2020. In March 2021, STGT completed the final
construction phase of incremental storage facilities bringing the
total terminalling capacity to 8.6 million barrels of crude oil
across 20 tanks. The Terminal is connected to the Permian and Eagle
Ford basins through multiple, newly-built pipelines and is
strategically positioned to connect these basins to global exports.
With two deep-water docks that enable the simultaneous loading of
two VLCCs and a permitted throughput capacity of 1 mmbbl/d, STGT is
the second largest U.S. crude oil export terminal by capacity and
accounted for approximately 12% of the United States’ total crude
oil exports in 2023 year-to-date7.
The Terminal achieved record volumes of over
670,000 bbl/d of oil in March 2023. Its advantaged location and
operational efficiencies, combined with its pipeline-connections to
leading North American resources plays, position STGT for continued
growth through optimization of existing capacity, and increasing
throughput volume. As U.S. crude oil exports grow, driven by
production growth from the low-cost, resource-rich Permian basin,
Gibson anticipates the potential for future expansions at the
Terminal.
On-Strategy Acquisition of
Liquids-Focused Infrastructure Business
Through the Transaction, Gibson expands and
enhances its North American terminal footprint by establishing a
third liquids hub underpinned by over 95%
take-or-pay revenue8.
The take-or-pay counterparties are existing customers of Gibson’s
current North American businesses and approximately 85% have
investment grade ratings, with the remaining customers being
subsidiaries of large, high-quality global companies.
After giving effect to the Transaction, Gibson’s
proportion of segment profit from infrastructure is expected to
increase to approximately 85%, and its proportion of infrastructure
revenue from take-or-pay contracts is expected to increase to
approximately 80%9,10.
Fully Financed Transaction, Structured
to Maintain Investment Grade Ratings
Gibson has fully committed bridge financing
facilities totaling US$1.1 billion in place with Royal Bank of
Canada, BMO Capital Markets, and JPMorgan Chase Bank N.A., Toronto
Branch (collectively the “Bridge Lenders”). Permanent financing of
the Transaction is expected to be achieved through a $350 million
bought deal offering of subscription receipts (the “Equity
Offering”) and subsequent offerings of senior unsecured medium-term
notes and hybrid debt securities of various tenors (the “Debt
Offerings”).
Concurrently, the Company will also be launching
an amendment to upsize its sustainability-linked revolving credit
facility from $750 million to $1.0 billion and has secured
commitments from the Bridge Lenders.
The financing of the Transaction, including the
Equity Offering and contemplated Debt Offerings, has been
structured to maintain the investment grade ratings and outlooks
assigned to Gibson by DBRS and S&P.
After giving effect to the Transaction, the
Equity Offering and the Debt Offerings, Gibson expects its Net Debt
to Adjusted EBITDA ratio to be approximately 3.2x, within the
targeted 3.0x to 3.5x range stated in Gibson’s Financial Governing
Principles11.
Closing Expected in the Third Quarter of
2023
Closing of the Transaction is expected to occur
in the third quarter of 2023, subject to satisfaction of customary
closing conditions, including the expiration or termination of the
waiting period under the U.S. Hart-Scott-Rodino Antitrust
Improvements Act.
J.P. Morgan Securities Canada is acting as
exclusive financial advisor, and Latham and Watkins LLP and Bennett
Jones LLP as legal advisors, with respect to the Transaction.
Bought Deal Equity Offering
Pursuant to the Equity Offering, Gibson has
entered into an agreement with a syndicate of underwriters (the
“Underwriters”) led by BMO Capital Markets and RBC Capital Markets
as joint bookrunners, for the issuance of 17,400,000 subscription
receipts (the “Subscription Receipts”) on a bought deal basis, at
an issue price of $ 20.15 per Subscription Receipt (the “Offering
Price”) for total gross proceeds of approximately $350 million.
Gibson has also granted the Underwriters an option, exercisable, in
whole or in part, at any time up to the earlier of 30 days
following the closing of the Equity Offering and the occurrence of
certain termination events with respect to the Subscription
Receipts, to purchase up to an additional 15% of the number of
Subscription Receipts purchased by the Underwriters under the
Equity Offering at the Offering Price to cover over-allotments, if
any, and for market stabilization purposes (the “Over-Allotment
Option”).
The gross proceeds from the Equity Offering,
less the portion of the underwriters’ fee that is payable on the
closing of the Equity Offering, will be held in escrow and are
intended to be used by Gibson to fund a portion of the purchase
price for the Transaction.
Each Subscription Receipt will entitle the
holder to receive, without payment of additional consideration and
without further action, one common share of Gibson (a “Common
Share”) upon the closing of the Transaction.
If the Transaction closes, a dividend equivalent
payment will be made to holders of Subscription Receipts of an
amount per Subscription Receipt, as applicable, that is equal to
the amount per Common Share of any cash dividends declared by the
board of directors of Gibson on the Common Shares to holders of
record on a date during the period from, and including, the closing
date of the Equity Offering to, but excluding, the closing date of
the Transaction, net of any applicable withholding taxes (the
“Dividend Equivalent Payment”). The Dividend Equivalent Payment
will be made on the later of the closing date of the Transaction
and the date the dividend is paid to holders of Common Shares. In
the event that the Transaction does not close, holders of
Subscription Receipts will not be entitled to receive any Dividend
Equivalent Payment.
The Equity Offering is expected to close on or
about June 22, 2023 and is subject to certain conditions including,
but not limited to, the receipt of all necessary approvals
including the approval of the Toronto Stock Exchange.
Further information regarding the Equity
Offering and the Transaction, including related risk factors, will
be set out in the prospectus supplement to Gibson’s short form base
shelf prospectus dated August 16, 2021, (collectively, the
“Prospectus”) that Gibson expects to file on SEDAR on or before
June 16, 2023. The Equity Offering will be made in all provinces of
Canada under the Prospectus and on a private placement basis in the
United States pursuant to exemptions from the registration
requirements of the U.S. Securities Act of 1933, as amended.
Investors should read the Prospectus before making an investment
decision.
Bennett Jones LLP and Latham and Watkins LLP are
acting as legal advisors to the Company with respect to the Equity
Offering. Norton Rose Fulbright Canada LLP is acting as Gibson’s
legal advisor with respect to the bridge financing obtained in
connection with the Transaction and the Debt Offerings.
Conference Call and Webcast
Details
A conference call and webcast will be held to
discuss the Transaction at 2:45pm Mountain Time (4:45pm Eastern
Time) today, June 14, 2023.
The conference call dial-in numbers are:
- 416-764-8659 / 1-888-664-6392
This call will also be broadcast on the Internet
and may be accessed directly at the following URL:
-
https://app.webinar.net/15n4dW4mAy8
The webcast will remain accessible for a
12-month period at the above URL. Additionally, a digital recording
will be available for replay two hours after the call's completion
until June 26, 2023, using the following dial-in numbers:
- 416-764-8677 / 1-888-390-0541
- Replay Entry Code: 955877
About Gibson Gibson Energy Inc.
is a leading North American liquids infrastructure company with its
principal businesses consisting of the storage, optimization,
processing, and gathering of liquids and refined products.
Headquartered in Calgary, Alberta, the Company’s operations are
currently focused around its core terminal assets located at
Hardisty and Edmonton, Alberta, and include the Moose Jaw facility
in Saskatchewan and an infrastructure position in the U.S.
Gibson shares trade under the symbol GEI and are
listed on the Toronto Stock Exchange. For more information, visit
www.gibsonenergy.com.
This press release does not constitute an offer
to sell securities, nor is it a solicitation of an offer to buy
securities, in any jurisdiction. All sales will be made through
registered securities dealers in jurisdictions where the Equity
Offering has been qualified for distribution. Neither the
Subscription Receipts nor the underlying Common Shares have been or
will be registered under the U.S. Securities Act of 1933, as
amended, or any state securities laws and such securities may not
be offered or sold in the United States absent registration or
pursuant to an exemption from such registration.
Readers' AdvisoryCertain
statements contained in this press release constitute
forward-looking information and statements within the meaning of
applicable securities laws (collectively, forward-looking
statements) including, but not limited to, statements concerning
Gibson's dividend payments or Gibson's future performance. All
statements other than statements of historical fact are
forward-looking statements. The use of any of the words
“anticipate”, “plan”, “aim”, “target”, “contemplate”, “continue”,
“estimate”, “expect”, “intend”, “propose”, “might”, “may”, “will”,
“shall”, “project”, “should”, “could”, “would”, “believe”,
“predict”, “forecast”, “pursue”, “potential”, “possible”, “capable”
and similar expressions are intended to identify forward-looking
statements. Forward-looking statements, included or referred to in
this press release include, but are not limited to statements with
respect to: the business and financial prospects and opportunities
of Gibson; the Transaction; the closing of the Transaction and the
timing thereof; the anticipated benefits of the Transaction;
Gibson’s financing plan for the Transaction; the availability and
terms of the bridge financing facilities; Gibson’s use of the
bridge financing facilities; the closing of the Equity Offering;
use of net proceeds from the Equity Offering; the availability and
closing of the Debt Offerings; use of net proceeds from the Debt
Offerings; growth and expansion of STLLC's facilities;
competitiveness of STLCC and Gibson following completion of the
Transaction; distributable cash flow per share accretion upon
completion of the Transaction; maintenance of Gibson's investment
grade credit ratings; increased scale and diversification of
Gibson's business upon completion of the Transaction; Gibson’s
take-or-pay exposure; and Gibson’s credit profile.
The forward-looking statements reflect Gibson's
beliefs and assumptions with respect to, among other things,
completion of construction, future operating revenues and financial
results; the satisfaction of all conditions to closing the
Transaction and the Equity Offering and the timing thereof; the
availability of the bridge financing facilities, and the terms
thereof; the availability of the Debt Offerings and the terms
thereof; the successful completion of the Transaction and Gibson's
ability to obtain the anticipated benefits therefrom; the accuracy
of historical and forward-looking operational and financial
information and estimates provided by STLLC; Gibson's ability to
integrate the assets acquired pursuant to the Transaction into
Gibson's operations; the impact of international or global events,
including government responses related thereto on demand for crude
oil and petroleum products and Gibson’s operations generally;
general economic and industry conditions; expected growth in future
distributable cash flows, the ability to deploy current and future
growth capital costs, service date, share repurchases under the
Gibson's NCIB, Gibson's ability to maintain future incremental
funding capacity and ongoing adherence to Gibson's Financial
Governing Principles.
Forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause
actual results or events to differ materially from those
anticipated in such forward-looking statements. Although Gibson
believes these statements to be reasonable, no assurance can be
given that the results or events anticipated in these
forward-looking statements will prove to be correct and such
forward-looking statements included in this press release should
not be unduly relied upon. Actual results or events could differ
materially from those anticipated in these forward-looking
statements as a result of, among other things, failure to complete
the Transaction in all material respects in accordance with the
Transaction; failure to obtain, in a timely manner, regulatory,
stock exchange and other required approvals in connection with the
Equity Offering and the Transaction; failure to close the bridge
financing facilities; failure to realize the anticipated benefits
of the Transaction; the materiality of any closing adjustments;
unforeseen difficulties in integrating STLCC’s business into
Gibson's operations; unexpected costs or liabilities related to the
Transaction; risks related to the accuracy of information provided
by the Sellers of STLCC in respect of the Transaction; the
availability and repayment of the bridge financing facilities; the
anticipated effect of the Transaction on Gibson's credit ratings;
risks inherent in the businesses conducted by Gibson and STLCC; the
effect of international or global events, including any
governmental responses thereto on Gibson’s business; the
uncertainty of the pace and magnitude of the energy transition and
the variation between jurisdictions; risks related to activism,
terrorism or other disruptions to operations; competitive factors
and economic conditions in the industries in which Gibson operates;
prevailing global and domestic financial market and economic
conditions; Gibson's ability to access various sources of debt and
equity capital, generally, and on terms acceptable to Gibson;
changes in government policies, laws and regulations, including
environmental and tax laws and regulations; and levels of demand
for our services and the rate of return for such services.
Financial outlook and future-oriented financial information
contained in this press release about prospective financial
performance, financial position or cash flows is based on
assumptions about future events, including economic conditions and
proposed courses of action, based on management's assessment of the
relevant information currently available and is subject to the same
risk factors, limitations and qualifications as set forth above.
The financial information included in this press release, has been
prepared by, and is the responsibility of, management. The purpose
of the financial outlook and future-oriented financial information
provided in this Presentation is to assist readers in understanding
Gibson's expected financial results following completion of the
Transaction, the Equity Offering and the Debt Offerings, and may
not be appropriate for other purposes. The Company and its
management believe that such financial information has been
prepared on a reasonable basis, reflecting the best estimates and
judgments, and that prospective financial information represents,
to the best of management's knowledge and opinion, the Company's
expected course of action. However, because this prospective
information is highly subjective, it should not be relied on as
necessarily indicative of past or future results, as the actual
results may differ materially from those set forth in this
Presentation.
PricewaterhouseCoopers LLP expresses no opinion
or any other form of assurance with respect to forward-looking
information contained in this Presentation. The report of
PricewaterhouseCoopers LLP to be incorporated by reference into the
prospectus supplement of the Company to be filed on SEDAR in
connection with the Equity Offerings relates to the historical
annual consolidated financial statements as at and for the years
ended December 31, 2022 and 2021 of Gibson only and does not extend
to the forward-looing information and should not be read to do
so.
The forward-looking statements contained in this
press release represent Gibson’s expectations as of the date hereof
and are subject to change. Gibson disclaims any intention or
obligation to update or revise any forward-looking statements
whether as a result of new information, future events or otherwise,
except as may be required by applicable laws. Readers are cautioned
that the foregoing lists are not exhaustive. For additional
information on the Company’s assumptions, and the risks and
uncertainties that could cause actual results to differ from the
anticipated results of our material risk factors, described in
"Forward- Looking Information" and "Risk Factors" included in
Gibson’s Annual Information Form and Management's Discussion and
Analysis dated each dated February 21, 2023 and the Prospectus,
including the prospectus supplement to be filed on SEDAR and
available on the Gibson website at www.gibsonenergy.com.
This press release includes information and data
obtained from third party sources, including industry publications
and publically available information, as well as information
prepared by management on the basis of its knowledge of the
industry in which the Company operates, including management's
estimates and assumptions relating to the industry based on that
knowledge. The Company believes that such information and data are
accurate and that its estimates and assumptions are reasonable, but
there can be no assurance as to the accuracy or completeness of
this information and data. Third party sources generally state that
the information contained therein has been obtained from sources
believed to be reliable, but there can be no assurance as to the
accuracy or completeness of included information. Although the
Company believes the information and data it obtained from third
party sources to be reliable, the Company has not independently
verified any of such information or data nor has the Company
ascertained the underlying economic or other assumptions relied
upon by such third party sources and cannot and does not provide
any representation or assurance as to the accuracy or completeness
of the information or data, or appropriateness of the information
or data for any particular purpose and, accordingly, disclaims any
liability in relation to such information and data. The Company
disclaims any intention or obligation to update or revise any
forward-looking statements whether as a result of new information,
future events or otherwise, except as may be required by applicable
laws.
Specified Financial
MeasuresThis document refers to certain specified
financial measures and industry measures that are used by the
Corporation and STLLC, respectively, as indicators of their
financial performance. These specified financial measures include
non-GAAP financial measures such as Adjusted EBITDA, Distributable
Cash Flow and Net Debt, in each case as presented on a standalone
or consolidated basis. These specified financial measures also
include non-GAAP ratios such as Net Debt to Adjusted EBITDA ratio,
Transaction value to Adjusted EBITDA ratio, Adjusted EBITDA to
Distributable Cash Flow ratio, Distributable Cash Flow Per Share,
Payout ratio and Infrastructure-only Payout ratio, in each case as
presented on a standalone or consolidated basis. A non-GAAP ratio
is a ratio in which at least one component is a non-GAAP financial
measure. Several of these Non-GAAP measures or Non-GAAP financial
ratios are adjusted to reflect the impact of the planned
Transaction and anticipated refinancing structure.
These specified financial measures are not
determined in accordance with GAAP, either US Generally Accepted
Accounting Principles (“US GAAP”) for STLCC, or International
Financial Reporting Standards (“IFRS”) for Gibson (individually or
collectively used as “Non-GAAP”), and do not have a standardized
meaning under IFRS or U.S. GAAP, as applicable, and therefore may
not be comparable to similar measures used by other companies. The
Corporation believes presenting non-GAAP financial measures helps
readers to better understand how management analyzes results, shows
the impacts of specified items on the results of the reported
periods, and allows readers to assess results without the specified
items if they consider such items not to be reflective of the
underlying performance of the Corporation's operations.
Management considers these to be important
supplemental measures of the Corporation's and STLLC's performance
and believes these measures are frequently used by securities
analysts, investors and other interested parties in the evaluation
of companies in industries with similar capital structures. Readers
are encouraged to evaluate each adjustment and the reasons the
Corporation considers it appropriate for supplemental analysis.
Readers are cautioned, however, that these measures should not be
construed as an alternative to net income, cash flow from operating
activities, segment profit, gross profit or other measures of
financial results determined in accordance with IFRS or U.S. GAAP,
as applicable, as an indication of the performance of the
Corporation or STLLC. For further details on these measures, see
the "Specified Financial Measures" section of the Corporation’s
MD&As for the year ended December 31, 2022 and the three months
ended March 31, 2023, each of which is incorporated by reference
herein and is available on our SEDAR profile at www.sedar.com and
on our website at www.gibsonenergy.com.
Corporation’s historical financial information
is prepared under IFRS and STLLC historical financial information
is prepared under US GAAP. Historical financial results for STLLC
have been converted from U.S dollars into Canadian dollars, using
rates in effect for the respective periods.
Adjusted EBITDA, Distributable Cash Flow, Net
Debt, Net Debt to Adjusted EBITDA and Distributable Cash Flow Per
Share are defined in the Corporation's MD&A for the three
months ended March 31, 2023, and are reconciled to their most
directly comparable financial measures under GAAP for the three
months ended March 31, 2023. For all prior periods, these measures
are reconciled to their most directly comparable financial measures
under GAAP in the Corporation’s MD&A for the respective year.
All such reconciliations in respect of the Corporation are in the
non-GAAP advisory section of the applicable MD&A, each of which
are available on Gibson's SEDAR profile at www.sedar.com and each
such reconciliation is incorporated by reference herein.
Transaction value to adjusted EBITDA, which is a
non-IFRS ratio that the Corporation considers useful to investors
as it demonstrates how much unlevered value the Transaction implies
compared to adjusted EBITDA of STLLC. Transaction value to adjusted
EBITDA is calculated as the Purchase Price divided by adjusted
EBITDA of STLLC.
Adjusted EBITDA to Distributable Cash Flow ratio
is a non-GAAP ratio, which is useful to investors as it
demonstrates the earning power of the business relative to free
cash flow available for distribution. Adjusted EBITDA to
Distributable Cash Flow ratio is defined as Adjusted EBITDA divided
by Distributable Cash Flow.
Forward adjusted EBITDA is a forward-looking
non-GAAP measure, which is computed in a manner consistent with
adjusted EBITDA, but requires the use of forward looking
information. As such, forward adjusted EBITDA is subject to
uncertainty. The Corporation believes it has used reasonable
forecasts to determine forward adjusted EBITDA, but actual results
may materially differ.
Reconciliation of non-GAAP financial
measures
Adjusted EBITDA reconciliation to the nearest
GAAP measure, Operating income for STLLC:
(US dollars in thousands) |
Three monthsended March 31,2023 |
Year endedDecember 31,2022 |
Last TwelveMonths (“LTM”)ended March 31,
2023 |
|
|
|
|
|
|
|
Operating income |
23,645 |
|
94,476 |
|
95,463 |
|
Depreciation and amortization |
3,157 |
|
12,822 |
|
12,809 |
|
Other income |
41 |
|
52 |
|
93 |
|
Adjusted EBITDA |
26,843 |
|
107,350 |
|
108,365 |
|
Adjusted EBITDA to DCF is a non-U.S. GAAP ratio
which the Corporation considers useful to investors as it
demonstrates the earning power of STLLC's business relative to free
cash flow available for distribution. Adjusted EBITDA to DCF ratio
is defined as adjusted EBITDA divided by DCF.
Distributable cash flow reconciliation to the
nearest GAAP measure, net cash provided by operating activities for
STLLC:
(US dollars in thousands) |
Three monthsended March 31,2023 |
Year endedDecember 31,2022 |
LTM ended March 31, 2023 |
|
|
|
|
Net cash provided by operating activities |
24,519 |
|
110,201 |
|
106,832 |
|
Changes in working capital |
2,147 |
|
(3,503 |
) |
879 |
|
Current income tax |
(177 |
) |
(652 |
) |
(654 |
) |
Distributable cash flow |
26,489 |
|
106,046 |
|
107,057 |
|
DCF is used to assess the level of cash flow
generated by STLLC and to evaluate the adequacy of generated cash
flow to fund dividends and is frequently used by securities
analysts, investors, and other interested parties. Changes in
non-cash working capital are excluded from the determination of DCF
because they are primarily the result of fluctuations in product
inventories or other temporary changes. Replacement capital
expenditures and lease payments are deducted from DCF as there is
an ongoing requirement to incur these types of expenditures.
Pro forma Adjusted EBITDA reconciliation to the
nearest GAAP measure, net income, for the Corporation and
STLLC:
|
For the twelve months ended March 31, 2023 |
Pro forma adjusted EBITDA(CAD$ dollars in
thousands) |
Gibson |
STLLC(1) |
Total |
|
|
|
|
|
Net Income |
259,526 |
|
125,472 |
|
384,998 |
|
|
|
|
|
|
Income tax expense |
77,935 |
|
865 |
|
78,800 |
|
Depreciation, amortization and impairment |
134,195 |
|
16,939 |
|
151,134 |
|
Net finance costs |
68,437 |
|
|
|
68,437 |
|
Unrealized gain on derivative financial instruments |
(7,068 |
) |
|
|
(7,068 |
) |
Stock based compensation |
18,534 |
|
|
|
18,534 |
|
Adjustments to share of profit from equity accounted investees |
6,866 |
|
|
|
6,866 |
|
Corporate foreign exchange gain) and other |
(3,267 |
) |
|
|
(3,267 |
) |
Adjusted EBITDA |
555,158 |
|
143,276 |
|
698,434 |
|
(1) Column was derived from historical
statements of operations of STLLC which were prepared in U.S.
dollars. The exchange rate used to translate the U.S. dollar
amounts is the average exchange rate for the twelve months ended
March 31, 2023, of $1.3222 for U.S.$1.00.
Pro forma distributable cash flow reconciliation to
the nearest GAAP measure, cash flow from operating activities, for
the Corporation and STLLC:
|
For the year ended December 31, 2022 |
Pro forma distributable cash flow (CAD$ dollars in
thousands) |
Gibson |
STLLC(1) |
Adjustment(2) |
Total |
Cash flow from operating activities |
598,312 |
|
143,383 |
|
- |
|
741,695 |
|
Adjustments: |
|
|
|
|
Changes in non-cash working capital and taxes paid |
(81,576 |
) |
(4,558 |
) |
- |
|
(86,134 |
) |
Replacement capital |
(22,241 |
) |
- |
|
- |
|
(22,241 |
) |
Cash interest expense, including capitalized interest |
(59,816 |
) |
- |
|
(74,642 |
) |
(134,458 |
) |
Lease payments |
(35,397 |
) |
- |
|
- |
|
(35,397 |
) |
Current income tax |
(43,074 |
) |
(848 |
) |
(9,290 |
) |
(53,212 |
) |
Distributable cash flow |
356,208 |
|
137,977 |
|
(83,932 |
) |
410,253 |
|
(1) Column was derived from the
historical statement of operations for the year ended December 31,
2022, of STLLC, which was prepared in U.S. dollars. The exchange
rate used to translate the U.S. dollar amounts is the average
exchange rate for the year ended December 31, 2022, of $1.3011 for
U.S.$1.00.
(2) Pro forma adjustments to reflect
additional interest expense for the assumed financing structure
(i.e. the Transaction is funded from the net proceeds of the Equity
Offering and the bridge financing facilities) as well as additional
income tax expense relating to STLLC.
Proforma Net Debt for the Corporation and
STLLC:
|
As at March 31, 2023 |
Pro forma Net debt (CAD$ dollars in
thousands) |
Gibson |
STLLC(1) |
Adjustment(2) |
Pro forma |
|
|
|
|
|
Debt |
1,577,069 |
|
- |
|
1,134,000 |
|
2,711,069 |
|
Lease Liabilities |
67,910 |
|
- |
|
- |
|
67,910 |
|
Less: unsecured hybrid debt |
(250,000 |
) |
- |
|
(250,000 |
) |
(500,000 |
) |
Less: cash and cash equivalents |
(40,586 |
) |
(1,859 |
) |
29,218 |
|
(13,227 |
) |
|
|
|
|
|
Net debt |
1,354,393 |
|
|
|
2,265,752 |
|
(1) Column was derived from the
historical balance sheet as at March 31, 2023 of STLLC, which was
prepared in U.S. dollars. The exchange rate used to translate the
U.S. dollar amounts is the exchange rate as of March 31, 2023 of
$1.35 for U.S.$1.00.
(2) Pro forma adjustments to incorporate
assumed refinancing structure, reflecting the intention replace the
bridge financing facilities with the net proceeds from the Equity
Offering and the Debt Offerings.
For further information, please
contact:
Beth PollockVice President & Treasurer
Phone: (403) 992-6478Beth.Pollock@gibsonenergy.com
Media RelationsPhone: (403)
476-6374communications@gibsonenergy.com
________________________1 Refers to STLLC 2023E
revenue under take-or-pay contracts.2 Distributable cash flow
(“DCF”) is a non-GAAP measure and DCF per share is a non-GAAP
ratio; neither of which has a standardized meaning under IFRS. See
“Specified Financial Measures”.3 Based on 2021 Scope 1 and 2
emissions intensity (tonnes of CO2e per barrel).4 Adjusted EBITDA,
forward Adjusted EBITDA, DCF and Net Debt do not have standardized
meaning under GAAP. See “Specified Financial Measures”.5 Based on
pro forma 2024E Adjusted EBITDA of the combined business after
giving effect to the Transaction.6 Based on 2024E DCF per share pro
forma the Equity Offering and the Debt Offerings (each as defined
below).7 Per RBN; STGT is the second largest facility based on Q1
2023A volumes.8 Based on STLLC 2022A Revenue.9 Proportion of
segment profit from infrastructure based on pro forma 2022A Segment
Profit.10 Percent of Infrastructure Revenue from take-or-pay
contracts based on pro forma 2022A Revenue.11 Net Debt to Adjusted
EBITDA is a non-GAAP ratio and does not have a standardized meaning
under IFRS. See “Specified Financial Measures”.
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