Husky Energy sold pipeline interests to Hong Kong giant

Husky Energy has reached an agreement under which 65 percent of its ownership interest in select midstream assets in the Lloydminster region of Alberta and Saskatchewan will be sold to Cheung Kong Infrastructure Holdings Limited and Power Assets Holdings Limited (PAH).
Husky will receive $1.7 billion of gross cash proceeds, will have a 35 percent interest in the assets and will remain operator. The sale price represents about 13 times the expected 2016 EBITDA of approximately $180 million.
The partners are aligned with expanding Husky’s heavy oil business and have the funding capacity to build the midstream infrastructure requirements associated with the planned construction of additional Lloyd thermal projects in Saskatchewan and Alberta.
The assets involved in this transaction include approximately 1,900 kilometres of pipeline in the Lloydminster region, 4.1 million barrels of oil storage capacity at Hardisty and Lloydminster, and other ancillary assets. A new limited partnership will be formed of which Husky will own 35 percent, Cheung Kong Infrastructure 16.25 percent and PAH 48.75 percent.
The transaction is subject to regulatory approval.