TransCanada To Set Up Parent Company
CALGARY -- - TransCanada PipeLines Ltd. said it planned to set up a parent company that would allow it to invest in energy operations apart from liquid hydrocarbons and natural gas-fired power.
TransCanada, the country's biggest pipeline firm, said it would ask investors to approve the plan to establish TransCanada Corp. as a holding company, and exchange their stock in the current company on a one-for-one basis.
The firm is currently restricted from getting various forms of financing for some investments by a covenant in trust indentures governing its debt securities. The change will not affect day-to-day operations, spokesman Glenn Herchak said.
"We've certainly said that we're interested in different non-gas-fired power generation facilities," Herchak said.
"Types of investments that may be pursued by TransCanada that may be restricted by the covenant include hydroelectric, biomass and coal-fired production."
Under the plan, the firm's assets and liabilities would remain with TransCanada PipeLines Ltd. and TransCanada Corp. would own TransCanada PipeLines.
Investors would become shareholders of TransCanada Corp., it said.
Investors are expected to vote on the initiative at the annual meeting on April 25.
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