Fortis Properties up for sale
Posted on September 30, 2014 | Atlantic Business Magazine | 0 Comments
Publicly-traded utility Fortis Inc. (TSX:FTS) has announced a plan to review “strategic options” for its real estate subsidiary, Fortis Properties Corporation. According to a release issued on September 29, those options include the “sale of all or a portion of the assets, a sale of shares of Fortis Properties or an initial public offering.”
Atlantic Business Magazine’s Dawn Chafe spoke to Fortis Properties president and CEO about the announcement.
Atlantic Business Magazine: Why would Fortis want to divest itself of Fortis Properties at this time? The timing seems off, considering the ongoing construction of Fortis Place in particular. Are you anticipating a significant or sudden drop in the real estate market?
Nora Duke: The decision to review strategic options was made by Fortis Inc. executive and its Board of Directors to better align with its core utility focus and strategy. With the growth in Fortis’ utility holdings, Fortis Properties now represents a very small piece of the overall group.
With respect to Fortis Place, we broke ground over three years ago. Construction of Fortis Place is nearing completion and we will be welcoming our first tenants next month. Office space in downtown St. John’s is a solid investment and we feel that this new office tower strengthens our commercial real estate portfolio.
ABM: If the sale takes place, would the money raised go towards a particular project?
ND: There is no particular project.
ABM: Is consideration of the sale in response to an enquiry from a prospective buyer?
ND: No. This will be an open, competitive process that will consider many options and opportunities.
ABM: Is the entire portfolio up for consideration, or select blocks of real estate?
ND: There may are many options and we can’t speculate on how the portfolio will be considered.
ABM: How long has this idea been under consideration?
ND: The Fortis Inc. Board of Directors recently approved the Fortis Properties review.
ABM: What would a sale mean to Fortis Properties staff? How would that differ from an independent IPO?
ND: It is much too early to tell what the impact will be on employees and jobs. For many employees, this will not represent significant change in their daily work. We have an amazing team of employees and we will take great care to be fair, reasonable and responsible throughout this process.
ABM: What is the proposed time line for the valuation and sale or IPO?
ND: Fortis Inc. has engaged CIBC World Markets Inc. and CBRE Limited as its advisors for this review. This process is expected to commence in the coming weeks and continue into 2015.
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