Houston-based Kinder Morgan is seeking to raise $1.75 billion by May 29 through an initial public offering (IPO) of shares in its controversial $7.4 billion 890,000 barrel per day Trans Mountain tar sands pipeline.
An IPO is when shares in a company are sold to institutional investors that in turn sell those shares to the general public on a securities exchange. A Reuters news story earlier this year suggested that one possible major investor in this pipeline is the Canada Pension Plan Investment Board (CPPIB).
Bloomberg News now reports, “Kinder Morgan is seeking to raise about $1.75 billion in an initial public offering of assets including the Trans Mountain pipeline system in Canada… The pipeline operator plans to offer the shares in Kinder Morgan Canada at between $19 and $22 apiece and list in Toronto, according to a regulatory filing Wednesday.”
That article adds, “Kinder Morgan is expected to retain as much as 77 per cent of Kinder Morgan Canada if the share sale were to proceed, the filing shows. Toronto-Dominion Bank and Royal Bank of Canada are leading the share sale.”
The Canadian Press highlights, “The U.S. company said it’s confident in interest from the investment community for the deal. The regulatory filing said Kinder Morgan Canada aims to close the IPO the week of May 29.”
The Trudeau government approved the pipeline in November 2016, but the transnational corporation needs to secure “acceptable financing” for the project before it makes a final investment decision.
On February 17, Reuters reported, “Kinder Morgan Inc. has begun talks with institutional investors including major Canadian pension funds and private equity firms to raise capital for its Trans Mountain pipeline project, according to people familiar with the process. Kinder Morgan has held discussions with Canada Pension Plan Investment Board, the Caisse de dépôt et placement du Québec and Ontario Teachers’ Pension Plan Board, three of the biggest Canadian pension funds, the people added. It was unclear whether talks with the three pension funds were still ongoing.”
By February 27, the Ontario Teachers’ Pension Plan had tweeted, “Ontario Teachers’ is not in talks to finance Kinder Morgan pipeline expansion.”
Take action! Help us get the Canada Pension Plan Investment Board to make a similar declaration before May 29. Please go to this action alert Stop your pension from building pipelines! that says to CPPIB president Mark Machin, “As a CPP contributor, I urge the CPPIB to take a principled stance and publicly refuse to invest any money in Kinder Morgan’s Trans Mountain pipeline.”
Kinder Morgan says it will begin clearing brush along the pipeline route this September, start construction on the pipeline in January 2018, and has set in-service date of late 2019. Court challenges have been launched to stop this, and there will likely be on-the-ground resistance, but stopping investment in the pipeline is also a key strategy.
Two-thirds of the 120 First Nations along the pipeline route have not given their free, prior and informed consent (FPIC) for the pipeline. One of those First Nations is the Secwepemc Nation. The 1,150-kilometre pipeline would cross 518 kilometres of their territory in British Columbia. FPIC is a fundamental principle of the United Nations Declaration on the Rights of Indigenous Peoples.
The Council of Canadians has been opposing the Kinder Morgan Trans Mountain tar sands pipeline since August 2011.
