Enbridge to raise dividend by 10% amid share issue, asset sales

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Enbridge Inc. is issuing $1.5-billion of shares and plans to sell at least $3-billion in assets as it seeks to fund major development projects and streamline its operations following its takeover of Spectra Energy.

Enbridge also said it is increasing its dividend by 10 per cent as part of a series of moves announced late Wednesday. The company has $22-billion worth of projects it intends to complete through 2020. It also aims to speed up debt reduction, it said.

"With the Spectra Energy assets now in the fold, we will focus our attention on what we do best and the value proposition that has served shareholders well over the years," Enbridge chief executive officer Al Monaco said in a statement.

"We will rationalize our asset mix to a pure regulated pipeline and utility business model, which emphasizes low-risk businesses and strong growth in our three crown jewel businesses: liquids pipelines and terminals, natural gas transmission and storage and natural gas utilities."

Enbridge shares are down 19 per cent since the company paid $37-billion to acquire U.S.-based Spectra in February, vastly expanding its North American pipeline network. It has spent the much of the year integrating the assets and reviewing what's core to the business.

It has identified $10-billion of assets it deems not crucial, including unregulated gas midstream and onshore renewables operations, and $3-billion of those are targeted for sale in 2018, Mr. Monaco said.

Enbridge, whose pipelines transport the majority of Canadian oil to the United States, said it is issuing common shares in a private placement to three large institutional investors for $44.84 each. It did not name the buyers. Close of the deal is scheduled for on Dec. 6.

It intends to issue another $4-billion of hybrid securities in 2018, it said.

Enbridge plans to offer more details of its moves at investor meetings in New York and Toronto next month.