[NEGT LOGO] National Energy & [TRANSCANADA LOGO]
Gas Transmission-TM- IN BUSINESS TO DELIVER
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N e w s R x x x x x x
NATIONAL ENERGY & GAS TRANSMISSION AND TRANSCANADA ANNOUNCE
SALE AGREEMENT FOR GAS TRANSMISSION NORTHWEST CORPORATION
TRANSACTION SUBJECT TO U.S. BANKRUPTCY COURT APPROVAL
BETHESDA, Md./CALGARY, Alberta - February 24, 2004 - (TSX: TRP) (NYSE: TRP) -
National Energy & Gas Transmission, Inc. (NEGT) and TransCanada Corporation
today announced an agreement for TransCanada to acquire Gas Transmission
Northwest Corporation (GTN) for US$1.703 billion, including US$500 million of
assumed debt and subject to typical closing adjustments.
GTN is a natural gas pipeline company that owns and operates two pipeline
systems - the Gas Transmission Northwest pipeline system, formerly known as
Pacific Gas Transmission, and the North Baja Pipeline system.
The Gas Transmission Northwest pipeline system consists of more than 1,350 miles
(2,174 kilometres) of pipeline extending from a point near Kingsgate, British
Columbia, on the British Columbia-Idaho border, to a point near Malin, Oregon on
the Oregon-California border. The natural gas transported on this pipeline
originates primarily from supplies in Canada for customers located in the
Pacific Northwest, Nevada and California.
The North Baja pipeline is an 80-mile (128-kilometre) system. It extends from a
point near Ehrenberg, Arizona to a point near Ogilby, California on the
California-Baja California, Mexico border. The natural gas transported on this
system comes primarily from supplies in the south-western United States for
markets in Northern Baja California, Mexico. The sale of the North Baja pipeline
is subject to a right of first refusal by another company.
NEGT voluntarily filed for protection under Chapter 11 of the U.S. Bankruptcy
Code in July 2003. As a result, the sale of GTN to TransCanada will be subject
to bankruptcy court approval, and will include a court-sanctioned auction
process in accordance with
customary bidding procedures approved by the bankruptcy court. Under a
court-sanctioned auction, NEGT will seek offers that are higher or otherwise
better than that which has been negotiated with TransCanada. As part of its
agreement, TransCanada is granted certain protections, subject to court
approval, most notably a break fee and expense reimbursement if another bid is
accepted. TransCanada also retains the right to amend its offer should NEGT
receive an offer which is superior to its existing agreement with TransCanada.
The agreement contemplates that final bankruptcy court approval of the sale will
be obtained within 75 days after signing of the agreement. The agreement also
contemplates bankruptcy court approval of the NEGT Plan of Reorganization.
Approval of NEGT's Plan could occur at a date later than the receipt of court
approval of the sale. The sale is also subject to anti-trust review.
TransCanada will finance the acquisition in a manner consistent with maintaining
its solid financial position and credit ratings. In addition to its strong
internally generated cash flow and $1.5 billion of committed credit lines,
TransCanada has $1.35 billion and US$650 million of debt and/or equity issuance
capacity remaining under its Canadian and U.S. shelf prospectuses, respectively.
TransCanada may also consider the sale of certain assets within its existing
portfolio. TransCanada expects the transaction to be accretive to earnings and
cash flow.
Lazard served as financial advisor to NEGT in connection with this agreement.
X.X. Xxxxxx Securities Inc. and XX Xxxx Xxxxxx, a division of Societe Generale,
served as financial advisors to TransCanada.
A map and fact sheet about the Gas Transmission Northwest pipeline system and
the North Baja Pipeline system is available on the Internet at xxx.xxx.xxxx.xxx,
xxx.xxxxxxxxx.xxxx.xxx and xxx.xxxxxxxxxxx.xxx.
In addition to the pipeline businesses, NEGT has more than 7,300 megawatts of
generation including a mix of natural gas, coal/oil, hydroelectric, waste coal
and wind power at numerous facilities across the country.
TransCanada is a leading North American energy company. TransCanada is focused
on natural gas transmission and power services with employees who are expert in
these businesses. TransCanada's network of approximately 39,000 kilometres
(24,200 miles) of pipeline transports the majority of Western Canada's natural
gas production to the fastest growing markets in Canada and the United States.
TransCanada owns, controls or is constructing nearly 4,700 megawatts of power -
an equal amount of power can meet the needs of about 4.7 million average
households. TransCanada's common shares trade under the symbol TRP on the
Toronto and New York stock exchanges. Visit TransCanada on the Internet at
xxx.xxxxxxxxxxx.xxx for more information.
FORWARD LOOKING INFORMATION
THE INFORMATION IN THIS NEWS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS THAT
ARE NECESSARILY SUBJECT TO VARIOUS RISKS AND UNCERTAINTIES. USE OF WORDS LIKE
"ANTICIPATE," "ESTIMATE," "INTEND," "PROJECT," "PLAN," "EXPECT," "WILL,"
"BELIEVE," "COULD," AND SIMILAR EXPRESSIONS HELP IDENTIFY FORWARD-LOOKING
STATEMENTS. THESE STATEMENTS ARE BASED ON CURRENT EXPECTATIONS AND ASSUMPTIONS
WHICH GAS TRANSMISSION NORTHWEST CORPORATION MANAGEMENT BELIEVES ARE REASONABLE
AND ON INFORMATION CURRENTLY AVAILABLE TO MANAGEMENT. ACTUAL RESULTS COULD
DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY THE FORWARD-LOOKING STATEMENTS.
ALTHOUGH MANAGEMENT BELIEVES THAT THE EXPECTATIONS REFLECTED IN THE
FORWARD-LOOKING STATEMENTS ARE REASONABLE, FUTURE RESULTS, EVENTS, LEVELS OF
ACTIVITY, PERFORMANCE, OR ACHIEVEMENTS CANNOT BE GUARANTEED. ALTHOUGH MANAGEMENT
IS NOT ABLE TO PREDICT ALL THE FACTORS THAT MAY AFFECT FUTURE RESULTS, SOME OF
THE FACTORS THAT COULD CAUSE FUTURE RESULTS TO DIFFER MATERIALLY FROM THOSE
EXPRESSED OR IMPLIED BY THE FORWARD-LOOKING STATEMENTS ARE DESCRIBED IN GREATER
DETAIL IN THE GAS TRANSMISSION NORTHWEST CORPORATION'S QUARTERLY REPORT ON FORM
10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2003.
CERTAIN TRANSCANADA INFORMATION IN THIS NEWS RELEASE IS FORWARD-LOOKING AND IS
SUBJECT TO IMPORTANT RISKS AND UNCERTAINTIES. THE RESULTS OR EVENTS PREDICTED IN
THIS INFORMATION MAY DIFFER FROM ACTUAL RESULTS OR EVENTS. FACTORS WHICH COULD
CAUSE ACTUAL RESULTS OR EVENTS TO DIFFER MATERIALLY FROM CURRENT EXPECTATIONS
INCLUDE, AMONG OTHER THINGS, THE ABILITY OF TRANSCANADA TO SUCCESSFULLY
IMPLEMENT ITS STRATEGIC INITIATIVES AND WHETHER SUCH STRATEGIC INITIATIVES WILL
YIELD THE EXPECTED BENEFITS, THE AVAILABILITY AND PRICE OF ENERGY COMMODITIES,
REGULATORY DECISIONS, COMPETITIVE FACTORS IN THE PIPELINE AND POWER INDUSTRY
SECTORS, AND THE CURRENT ECONOMIC CONDITIONS IN NORTH AMERICA. FOR ADDITIONAL
INFORMATION ON THESE AND OTHER FACTORS, SEE THE REPORTS FILED BY TRANSCANADA
WITH CANADIAN SECURITIES REGULATORS AND WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION. TRANSCANADA DISCLAIMS ANY INTENTION OR OBLIGATION TO UPDATE
OR REVISE ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW
INFORMATION, FUTURE EVENTS OR OTHERWISE.
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Media Inquiries: TransCanada Xxxxx Xxxxx/Xxxx Xxxxxx (000) 000-0000
NEGT Xxxxxxx Xxxxx (000) 000-0000
Investor & Analyst
Inquiries: TransCanada Xxxxx Xxxxxx/Xxxxxx Xxxxx (000) 000-0000
