Enbridge Income Fund Holdings Inc.
TSX : ENF

Enbridge Income Fund Holdings Inc.

December 03, 2014 19:55 ET

Enbridge Income Fund to Receive Large Scale Drop Down Proposal From Enbridge

CALGARY, ALBERTA--(Marketwired - Dec. 3, 2014) - Enbridge Income Fund (EIF or the Fund) and Enbridge Income Fund Holdings Inc. (TSX:ENF) (EIFH) were advised today that Enbridge Inc. (TSX:ENB) (NYSE:ENB) (Enbridge), which is the sponsor of the Fund and of EIFH, intends to make a proposal to transfer its Canadian Liquids Pipelines business, as well as additional renewable assets, to the Fund (the Proposal). The transfer would be part of a broader financial restructuring plan announced today by Enbridge. Enbridge has indicated that, under the terms of the proposal, EIFH is expected to acquire an increasing interest in the business through investments in EIF over a period of several years in amounts consistent with its equity funding capability. Enbridge expects that the investments by EIFH will result in an average growth rate in the dividend on EIFH's common shares of 10% per year from 2015 through 2018.

EIF and EIFH have not yet received a formal proposal from Enbridge and understand that such proposal will be subject to certain preliminary restructuring steps to be undertaken by Enbridge, and other customary approvals. EIF and EIFH will form a joint special committee of independent directors to assess the Proposal. Enbridge has indicated that it is targeting this process to be complete mid-2015.

The assets proposed to be transferred to EIF include $16 billion of combined carrying value of Liquids Pipelines assets with an associated secured growth capital program of approximately $15 billion, plus $1 billion of renewable energy assets. These assets are described more fully in Enbridge's news release.

"Enbridge has previously indicated its intention to continue to drop additional assets into the Fund to assist in the funding of Enbridge's large growth program," commented Perry Schuldhaus, president of the Fund. "The plan announced today provides further definition and clarity to that intention. If the proposal announced by Enbridge is completed, it would have the effect of transforming the Fund into the largest midstream energy infrastructure organization in Canada and would provide the Fund and EIFH with a substantial and visible source of growth in earnings and distributions. Our ability to efficiently access the capital markets to support this drop down strategy is demonstrated by the recent equity and debt issuances in relation to the $1.8 billion acquisition just completed in November. I look forward to receiving the proposal and to facilitating the work of the special committee."

ABOUT ENBRIDGE INCOME FUND HOLDINGS INC.

Enbridge Income Fund Holdings Inc. is a publicly traded corporation. The Company, through its investment in Enbridge Income Fund, holds high quality, low risk energy infrastructure assets. The Fund's assets include interests in more than 500 megawatts of renewable and alternative power generation capacity, a portfolio of liquids transportation and storage businesses including Class A Shares in the Southern Lights Pipeline and a 50 per cent interest in the Alliance Pipeline. Information about Enbridge Income Fund Holdings Inc. is available on the Company's website at www.enbridgeincomefund.com.

FORWARD-LOOKING INFORMATION

Forward-looking information, or forward-looking statements, have been included in this news release to provide EIFH's shareholders and potential investors in the Fund and EIFH with information about the Fund, EIFH and their subsidiaries and affiliates, including management's assessment of EIFH, EIF's and their subsidiaries' future plans and operations. This information may not be appropriate for other purposes. Forward-looking statements are typically identified by words such as "anticipate", "expect", "project", "estimate", "forecast", "plan", "intend", "target", "believe" and similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information or statements included or incorporated by reference in this document include, but are not limited to, statements with respect to: receipt of a proposal by Enbridge with respect to the restructuring; expectations regarding the restructuring by Enbridge, including the negotiation of definitive terms, satisfaction of conditions and the obtaining of consents and approvals required to complete the restructuring; average growth rate and increased dividend payout by EIFH upon completion of the restructuring; effect, results and perceived benefits of the restructuring to EIFH and the Fund; future equity investments in the Fund by EIFH; and expected timing and completion of the restructuring and revised dividend payout payout.

Although EIFH and EIF believe these forward-looking statements are reasonable based on the information available on the date such statements are made and processes used to prepare the information, such statements are not guarantees of future performance and readers are cautioned against placing undue reliance on forward-looking statements. By their nature, these statements involve a variety of assumptions, known and unknown risks and uncertainties and other factors, which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by such statements. Material assumptions include assumptions about: expected receipt of the proposal from Enbridge; expected timing and terms of the restructuring; anticipated completion of the restructuring; increase of the dividend payout; receipt of regulatory, shareholder and third party consents and approvals with respect to the restructuring; impact of the restructuring and increased dividend payout on the future cash flows of EIFH and EIF; impact of the restructuring and revised dividend payout on the credit ratings of EIF; expected earnings/(loss) or adjusted earnings/(loss); expected earnings/(loss) or adjusted earnings/(loss) per share or unit, as applicable; expected future cash flows; estimated future dividends; expected supply and demand for crude oil, natural gas and natural gas liquids; prices of crude oil, natural gas and natural gas liquids; expected exchange rates; inflation; interest rates; availability and price of labour and pipeline construction materials; operational reliability; anticipated in-service dates and weather. Assumptions regarding the expected supply of and demand of crude oil, natural gas, NGL and renewable energy, and the prices of these commodities, are material to and underlie all forward-looking statements. These factors are relevant to all forward-looking statements as they may impact current and future levels of demand for the services of the Fund, which may in turn impact the current and future performance of EIFH. Similarly, exchange rates, inflation and interest rates impact the economies and business environments in which the Fund operates and may impact levels of demand for the Fund's services and cost of inputs, and are therefore inherent in all forward-looking statements. Due to the interdependencies and correlation of these macroeconomic factors, the impact of any one assumption on a forward-looking statement cannot be determined with certainty, particularly with respect to expected earnings/(loss) or adjusted earnings/(loss) and associated per share or per unit amounts, or estimated future dividends and distributions. The most relevant assumptions associated with forward-looking statements on the restructuring and revised dividend payout, including estimated completion date and expected future cash flows, include: expected earnings/(loss) or adjusted earnings/(loss) of EIFH and EIF; expected earnings/(loss) or adjusted earnings/(loss) per share or per unit of EIFH and EIF; expected future cash flows of EIFH and EIF; estimated future distributions of EIF; expected market conditions; and the ability of EIFH to access capital markets on favourable terms or at all.

These forward-looking statements are subject to risks and uncertainties pertaining to the restructuring, revised dividend payout, adjusted earnings guidance, operating performance, regulatory parameters, project approval and support, weather, economic and competitive conditions, changes in tax law and tax rate increases, exchange rates, interest rates, commodity prices and supply and demand for commodities, including but not limited to those risks and uncertainties discussed in this news release and in the other filings with securities regulators by EIFH and EIF. The impact of any one risk, uncertainty or factor on a particular forward-looking statement is not determinable with certainty as these are interdependent of EIFH and EIF and the future course of action depends on management's assessment of all information available at the relevant time. Except to the extent required by applicable law, neither EIFH or the Fund assumes an obligation to publicly update or revise any forward-looking statements made in this news release or otherwise, whether as a result of new information, future events or otherwise. All subsequent forward-looking statements, whether written or oral, attributable to EIFH or the Fund or persons acting on their behalf, are expressly qualified in their entirety by these cautionary statements.

Readers should be cautioned that there is no assurance that the restructuring will be completed in the manner contemplated, or at all, or that the current market conditions and the assumptions and forecasts by Enbridge, EIFH and EIF based on such market conditions will not materially change.

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