EnCana shares jump on plan to split company September 16, 2009
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Shares of EnCana soared from the opening bell Friday as investors and analysts welcomed the energy giant’s relaunched plan to split itself in two.
EnCana shares closed up $4.18 at $63.52 on the TSX ? a gain of seven per cent.
EnCana 3-month TSX chart
Late Thursday, EnCana announced it had revived a plan to split itself into two companies ? one to hold its oil assets and one for natural gas. That plan, first floated in May 2008, was deferred a few months later when the credit crisis developed.
The pure-play natural gas part of the company will be known as EnCana while the integrated oil company will be called Cenovus Energy. EnCana shareholders are to receive one share of each company.
“Since we delayed our plans last October due to the meltdown in the financial markets, a number of positive things have occurred and we’re ready to proceed with this value-enhancing transaction,” EnCana CEO Randy Eresman told analysts on a conference call Friday.
That was a reference to improvements in equity markets and the availability of cheaper debt financing. Launching Cenovus would require at least $5 billion in financing.
Analysts were quick to upgrade the stock. BMO Capital Markets raised EnCana from “market perform” to “outperform” and boosted its price target by $5 to $65.
“We believe the newly formed natural gas company is well positioned to deliver consistent growth in production and free cash flow from its impressive asset base,” analyst Randy Ollenberger said in a client note.
UBS analyst Andrew Potter gave the split plan a thumbs-up in his client note. “Overall, we believe the transaction is positive over the long term.”
(With files from The Canadian Press) (more…)
EnCana shares jump on plan to split company September 14, 2009
Posted by businessnewss in businessnewss.wordpress.com.Tags: Company, EnCana, Jump, PLAN, SHARES, split
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Shares of EnCana soared from the opening bell Friday as investors and analysts welcomed the energy giant’s relaunched plan to split itself in two.
EnCana shares closed up $4.18 at $63.52 on the TSX — a gain of seven per cent.
EnCana 3-month TSX chart
Late Thursday, EnCana announced it had revived a plan to split itself into two companies — one to hold its oil assets and one for natural gas. That plan, first floated in May 2008, was deferred a few months later when the credit crisis developed.
The pure-play natural gas part of the company will be known as EnCana while the integrated oil company will be called Cenovus Energy. EnCana shareholders are to receive one share of each company.
“Since we delayed our plans last October due to the meltdown in the financial markets, a number of positive things have occurred and we’re ready to proceed with this value-enhancing transaction,” EnCana CEO Randy Eresman told analysts on a conference call Friday.
That was a reference to improvements in equity markets and the availability of cheaper debt financing. Launching Cenovus would require at least $5 billion in financing.
Analysts were quick to upgrade the stock. BMO Capital Markets raised EnCana from “market perform” to “outperform” and boosted its price target by $5 to $65.
“We believe the newly formed natural gas company is well positioned to deliver consistent growth in production and free cash flow from its impressive asset base,” analyst Randy Ollenberger said in a client note.
UBS analyst Andrew Potter gave the split plan a thumbs-up in his client note. “Overall, we believe the transaction is positive over the long term.”
(With files from The Canadian Press)
EnCana shares jump on plan to split company September 14, 2009
Posted by businessnewss in businessnewss.wordpress.com.Tags: Company, EnCana, Jump, PLAN, SHARES, split
comments closed
Shares of EnCana soared from the opening bell Friday as investors and analysts welcomed the energy giant’s relaunched plan to split itself in two.
EnCana shares closed up $4.18 at $63.52 on the TSX — a gain of seven per cent.
EnCana 3-month TSX chart
Late Thursday, EnCana announced it had revived a plan to split itself into two companies — one to hold its oil assets and one for natural gas. That plan, first floated in May 2008, was deferred a few months later when the credit crisis developed.
The pure-play natural gas part of the company will be known as EnCana while the integrated oil company will be called Cenovus Energy. EnCana shareholders are to receive one share of each company.
“Since we delayed our plans last October due to the meltdown in the financial markets, a number of positive things have occurred and we’re ready to proceed with this value-enhancing transaction,” EnCana CEO Randy Eresman told analysts on a conference call Friday.
That was a reference to improvements in equity markets and the availability of cheaper debt financing. Launching Cenovus would require at least $5 billion in financing.
Analysts were quick to upgrade the stock. BMO Capital Markets raised EnCana from “market perform” to “outperform” and boosted its price target by $5 to $65.
“We believe the newly formed natural gas company is well positioned to deliver consistent growth in production and free cash flow from its impressive asset base,” analyst Randy Ollenberger said in a client note.
UBS analyst Andrew Potter gave the split plan a thumbs-up in his client note. “Overall, we believe the transaction is positive over the long term.”
(With files from The Canadian Press)
EnCana relaunches plan to split September 11, 2009
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EnCana Corp. said late Thursday it is relaunching its plan to split itself into two firms ? a natural gas company and an integrated oil company.
The natural gas company will keep the EnCana name, while the oil company will be named Cenovus Energy Inc.
Calgary-based EnCana said after the close of stock market trading that its board of directors unanimously approved the plans, which were originally unveiled in May 2008 only to be shelved in October 2008 due to the turbulence that was affecting financial markets at that time.
EnCana president and CEO Randy Eresman said market conditions have improved to the point where the split can proceed.
“Equity and debt markets have improved significantly with debt financing available at reasonable cost,” Eresman said in a release. “Global and national economic indicators suggest that the world?s economies are showing promising signs of recovery.
Eresman added that while natural gas prices are currently low, the company has cut its short-term risk by hedging a significant portion of its expected production for the 2009-2010 gas year.
Under the proposed split, current EnCana shareholders would keep their EnCana stock, and get one Cenovus common share for each EnCana share held.
EnCana plans that the initial combined dividends of the two companies will be approximately equal to EnCana?s current dividend of $1.60 US per share annually.
Union demands details on Vale’s plan to reopen Sudbury mine August 29, 2009
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Federal NDP Leader Jack Layton has met with striking miners in Sudbury, Ont., who are angry over their employer Vale Inco’s plans to reopen mining operations using management and non-union labour.
On July 13, more than 3,100 mining and processing workers at Vale’s operations in Sudbury hit the picket lines after voting to reject the company’s contract offer.
More than six weeks on, reports say Vale plans to use management and other non-union workers to restart some operations in Sudbury.
‘How is it a net benefit to Canada to force people to work in conditions they’re not trained to work in?’?NDP Leader Jack Layton
Representatives of the United Steelworkers and Vale Inco are expected to sit down at the table again soon, but it won’t be to resume contract negotiations, according to a report in the Sudbury Star.
The union wants details on the company’s plan to resume operations.
“It’s dangerous work we’re talking about: working on muck piles and installing roof bolts for ground support,” miner Jack Simons told CBC News. “These guys have no idea what they’re getting into, but they have no choice.”
No benefit, Layton says
When the federal government approved Vale’s takeover of Inco almost three years ago, it said it gave the deal the green light because it would provide a “net benefit” to Canada as required under the Investment Canada Act, Layton said as he paid a visit to the picket line Thursday.
“How is it a net benefit to Canada to force people to work in conditions they’re not trained to work in?” Layton said. “And then forcing them to take the training, telling them that if you don’t ? you’ll lose your job?”
Vale said staff are being assigned to work based on their skills and previous experience.
At issue in the strike is Vale’s proposal to reduce a bonus tied to the price of nickel, as well as a plan by the company to exempt new employees from its defined-benefit pension plan, moving them instead to a defined-contribution plan.
It is the first strike at the Sudbury operations since Brazil-based Companhia Vale do Rio Doce bought the former Inco Ltd. for $19 billion in October 2006.
Bruce Power drops plan to build Ont. reactors July 25, 2009
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Bruce Power has dropped plans to build new reactors in Ontario’s Bruce County, the company said Thursday.
The company said it has opted to focus on refurbishing its Bruce A and B reactor units at its site about 250 kilometres northwest of Toronto on Lake Huron.
The company also said it will withdraw its application to build reactors in Nanticoke, on Lake Erie, citing declining provincial energy demand.
“These are business decisions unique to Ontario and reflect the current realities of the market,” said Duncan Hawthorne, Bruce Power’s president and chief executive officer.
“Our focus has always been to find the best way to provide Ontario with a long-term supply of 6,300 megawatts. For more than five years, we’ve examined our options and refurbishing our existing units has emerged as the most economical.”
The Bruce A and B units have four CANDU reactors each. Six of them are operating, while two are down for refit.
Bruce Power said Thursday it will work with investors and the Ontario Power Authority to investigate refurbishing the six operating units after the restart of the two units that are down.
Bruce Power also said the decision to shelve new Ontario reactors won’t stop its plans to construct reactors in Alberta and Saskatchewan.
In late June, the Ontario government dropped its plans to build two new nuclear reactors at the Darlington power station, blaming the decision on rising costs.
Quebec to fight federal securities regulator plan July 12, 2009
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The Quebec government is planning a legal challenge to any national securities regulator because it would violate the province’s constitutional and jurisdictional rights, Finance Minister Raymond Bachand said Wednesday.
Securities regulation is a provincial power, but the federal government is pushing for a national body in place of the provincial and territorial securities commissions to fix what Finance Minister Jim Flaherty has called a “glaring weakness.”
The national body, which is still being planned, would provide clearer national accountability, stronger enforcement, better service for investors and lower barriers within Canada, Flaherty has said.
Quebec does not believe that a national commission would be more efficient, and the provincial securities regulators have already harmonized their rules and regulations, Bachand said.
“So the inter-provincial system is working well. It’s closer to the client. It’s closer to the investors and, I think, more efficient that way,” he said.
Flaherty announced an office to help develop the national regulator on June 22.
The office will develop the federal Securities Act, collaborate with provinces and territories and develop a transition plan to cover organizational and administrative matters, the government said.
The office “intends to work collaboratively with provinces and territories that are willing to participate,” the government said.
Alberta has also objected to the proposed national commission.
Quebec is willing to fight the federal initiative to Supreme Court of Canada, Bachand said.
Federal government rolls out $1B aid plan for pulp and paper producers June 17, 2009
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Under a new federal program, mills across the country can apply for money to improve energy efficiency and environmental performance.(Jeff Bassett/Canadian Press)
The federal government is rolling out a $1-billion aid package for Canadian pulp and paper producers.
Natural Resources Minister Lisa Raitt and Denis Lebel, the minister of state for the Economic Development Agency of Canada for the Regions of Quebec, announced the package in Ottawa on Wednesday.
What is black liquor?
Mills have long burned “black liquor” — a byproduct created when wood is processed into fibre — to generate steam energy. According to the Center for Paper Business and Industry Studies, about 240 million tons of black liquor are produced every year around the world.
In March 2009, the financial services group J.P. Morgan released a report suggesting many U.S. mills were “burning black liquor into gold.” Under the U.S. program, mills that combine diesel fuel with a pulp byproduct can qualify for a biofuel tax credit. The report said an average sized U.S. pulp mill would burn more than 175 million gallons of black liquor in a year, earning an annual credit of $90 million US.
Raitt said that only mills producing “black liquor” between January 1 and December 31 of this year will be eligible. Black liquor is a biomass by-product of the chemical pulping process that is used by pulp producers to generate energy for their mills.
The federal government said that under its Green Transformation Program, it will provide 16 cents in funding per litre of black liquor, up to a maximum total of $1 billion.
Raitt said 27 mills across the country will be eligible under the program.
Producers participating in the program will be required to invest the money over the next three years on improvements to their energy efficiency or their environmental performance at any pulp and paper mill in Canada.
The move comes after Canadian firms sought aid from the government in response to a black liquor subsidy received by U.S. producers, who get a tax credit for using the alternative fuel. The U.S. black liquor subsidy is estimated at $6 billion to $8 billion.
Pro and con
The head of a Canadian forestry business group applauded Ottawa’s move, but Canada’s largest forest union denounced it.
“It won’t save any mills or prevent further job loss,” said Communications, Energy and Paperworkers Union president Dave Coles.
The money cannot be used to lower the cost of making pulp, which is necesary to compete with the U.S. mills that are using the U.S. black liquor subsidy to cut their costs and sell more pulp, he said.
“In the short term, mills will still close because in order to take advantage of the subsidy, they must invest in capital,” Coles said. He fears this will lead to more lost forest industry jobs on top of the 55,000 the union says has already disappeared over the last two years.
However, Avrim Lazar, president of the Forest Products Association of Canada, welcomed the program. “This is a government getting it right,” he said, adding that it will lead to a greener industry and will conserve jobs.
“This is very smart spending,” Lazar said.
Flaherty announces $12-billion plan to boost auto purchase financing May 11, 2009
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In an effort to bolster the ailing auto sector, the federal government announced on Friday it is rolling out a $12-billion program to support financing to buy or lease vehicles and equipment.
“A serious shortfall in Canada has been the lack of financing of vehicles and equipment for consumers and businesses, and this has led to increased borrowing costs for some and limited credit availability for others,” Finance Minister Jim Flaherty said in a speech to the Canadian Club of Hamilton.
“It’s a situation that can’t be allowed to continue if we want to restore confidence and get our economy growing again.”
Flaherty announced the rollout of the Canadian Secured Credit Facility, a program under which the government will purchase asset-backed securities backed by loans and leases on vehicles and equipment. The program had been announced in the budget.
Flaherty said the Business Development Bank of Canada has allocated $10 billion of the $12 billion to 15 Canadian lenders.
The group includes the financing arms of major auto and equipment manufacturers in Canada and covers loans, leases and dealer floor plans, Flaherty said.
To limit risk to taxpayers, the assets must be rated AAA by two nationally recognized credit rating agencies and “structured so that they will be able to withstand current market conditions or worse.”
“The auto sector isn’t just assemblers, as you know. There are many people in the auto sector who are employed and rely on the success of the sector,” Flaherty said.
Ont. Teachers’ Pension Plan sees assets fall more than $21B April 3, 2009
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The Ontario Teachers’ Pension Plan saw its assets retreat to $87.4 billion at the end of 2008 from $108.5 billion a year earlier as the fund was battered by losses on equities and fixed income.
OTPP said its investment return for 2008 was ?18 per cent, and underperformed the fund’s benchmark return of ?9.6 per cent.
“Our investment team fought hard against the downward pressure of the global credit freeze and subsequent stock, bond and real estate market crashes throughout the year; but market forces retained the upper hand at year-end,” said Jim Leech, the fund’s president and CEO.
“It is small consolation to us that our results are consistent with the average of other large Canadian pension plans,” he said.
Last year, the fund lost $12.5 billion on its equity investments, largely due to the slide in global stock market.
In fixed income, the fund dropped $6.7 billion in losses on credit products and hedge funds.
OTPP did turn a positive return of $200 million on infrastructure assets and real-return bonds.
