Canada misses Trans Mountain's fast resale deadline

OTTAWA-There are about a dozen parties interested in Trans Oil Mountain pipeline, but the Canadian government will not be able to reach an agreement before the end of the marketing period with Kinder Morgan Inc., according to people familiar with the situation.

The $ 4.5 billion purchase of the pipeline and expansion project a six-week window, until July 22, to market the pipeline for sale to a third. A quick sale would have effectively allowed the government to substitute another buyer for the current agreement to be finalized.

This Sunday deadline is scheduled. The agreement will be finalized with the government as a new owner, and he will seek a new buyer without the help of Kinder Morgan, amid fears of legal and political delays. About a dozen parties have signed non-disclosure agreements as part of the potential resale process, and the project is likely to be purchased by a consortium led by Canada rather than a single buyer. 19659008] The sale of Trans Mountain is expected to close at the end of the third quarter or early in the fourth quarter, as the project faces continued opposition from the Premier of British Columbia and awaits a key court decision . The Canadian unit Kinder Morgan has not responded to a request for comment. A spokesman for Finance Minister Bill Morneau declined to say directly that there would be a sale to a third party before July 22, but said the government would not keep the pipeline forever.

"We have no interest in," spokesman Daniel Lauzon said on the phone when he was questioned about a sale.

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was announced on May 29 and the government has already marketed the pipeline.A regulatory document filed by Kinder Morgan this month gave an overview of the high stakes negotiations that led to the nationalization of the pipeline while Kinder balked in the political landscape

on March 6 – a month before company asked for clarification from the government and for a financial support arrangement.The talks took place that month, l & rsquo; Company proposing to the government to "take specific legislative and executive action" and accept a safety net to "compensate" the company for any costs of expansion if it abandoned the project . In exchange, the government would have had the option of buying a 5% stake in the pipeline for a "nominal consideration". The government has expressed its willingness to provide a safety net "subject to many conditions", while the company

The company suspended all non-essential work and expenses on April 8. Two days later, government officials [traduction] "raised the possibility" to buy a 51% stake in the pipeline

. Kinder Morgan then launched the idea of ​​a 100% sale and, on April 30, the company proposed a $ 6.5 billion price for badets, including the existing pipeline and the project of expansion

. presenting two alternative proposals. The first, which the government preferred, was for the company to proceed with construction by relying on a government safety net. The second was to bundle the badets – with the government guarantee – and try to find a buyer. According to this proposal, if a sale could not be organized, the government would purchase for $ 2.3 billion plus an unspecified $ 1.1 billion in capital expenditures up to now.

The following day, the council unanimously rejected the proposal. On May 10, Kinder Morgan CEO Steven Kean told Morneau by phone that the proposed firewall was unacceptable to the company because it did not give him any certainty as to his ability to build in Colombia -British. On May 22, the government offered $ 3.85 billion, a figure based on an badysis of its financial advisers, Greenhill & Co., and suggested closing the deal in December. The company thought it would be too long.

On May 23, the company responded to $ 4.5 billion, which after tax on capital gains would be $ 4.2 billion. After a pause of several hours, the government has agreed to certain conditions, including the 6-week marketing window that ends July 22.