The Successful Investor Hotline – Friday, August 21, 2015

Article Excerpt

ENBRIDGE INC., $52.32, Toronto symbol ENB, continues to move ahead with the major reorganization it announced in December 2014. The company plans to transfer its pipelines to 19.9%-owned affiliate Enbridge Income Fund Holdings Inc. (Toronto symbol ENF). This company owns 42% of Enbridge Income Fund (Enbridge Inc. owns the remaining 58%), which holds a variety of businesses, including oil and gas pipelines and solar and wind farms. Under the proposal, Enbridge will transfer pipelines that pump oil sands crude to the U.S., along with wind farms in Alberta and Quebec, to Enbridge Income Fund. Transactions like this, called drop-downs, free up cash the parent company can use for new projects. The affiliate also benefits, because the new assets’ cash flow helps it maintain or raise its distributions to investors. This week, shareholders of Enbridge Income Fund Holdings, excluding Enbridge’s 19.9% stake, voted to approve the plan. The two firms expect to complete the transfer by September 1, 2015. The reorganization has already freed up…