This transaction will not affect our employees or the service we provide to more than 7 million Texas consumers. Our dedicated employees will continue to provide superior reliability while deploying one of the most advanced utility technology platforms in the country.
DALLAS (PRWEB) August 13, 2008
"We are pleased that Borealis and GIC SI see Oncor as a solid, long-term investment," said Bob Shapard, Chairman and CEO of Oncor. "This transaction will not affect our employees or the service we provide to more than 7 million Texas consumers. Our dedicated employees will continue to provide superior reliability while deploying one of the most advanced utility technology platforms in the country."
Under the agreement, the investor group will pay approximately $1.254 billion for an approximate 19.75 percent minority interest in Oncor and will have the right to add two directors to Oncor's board of directors. A majority of Oncor's directors will remain independent. Oncor's separateness will be further enhanced as the investor group's new directors will be granted certain rights with respect to Oncor's activities, which include preventing the payment of distributions if in the best interest of Oncor, approving significant deviations from approved capital and operating and maintenance expenditure budgets (excluding certain expenditures required for regulatory or legal purposes), and consenting to certain other material actions.
In upgrading Oncor's credit rating, S&P indicated that the sale and rights granted to the minority investor's directors further solidify Oncor's separateness from EFH and its other subsidiaries.
"The upgrade is a strong vote of confidence by an independent voice of the structure that was put in place to ring-fence Oncor from the obligations of EFH and its subsidiaries," said Shapard. "Oncor plans to invest billions of dollars in the infrastructure needs of Texas over the next several years and these measures only serve to strengthen our ability to do so."
Borealis manages OMERS infrastructure investments and has been a world leader in developing infrastructure investing as an asset class for institutional investors. OMERS is one of Canada's largest pension plans, with more than $52 billion invested in a wide range of companies and assets around the world. OMERS provides retirement benefits to 380,000 members across Ontario. GIC SI is the private equity and infrastructure arm of the Government of Singapore Investment Corporation (GIC). GIC was established in 1981 as a global investment company to manage Singapore's foreign reserves, which now stand at more than $100 billion. GIC SI is one of the world's largest and most well-respected private equity investors, and an established player in the infrastructure market, with a long-term, buy and hold strategy in companies all over the world, including the U.S.
Oncor is a regulated electric distribution and transmission business that uses superior asset management skills to provide reliable electricity delivery to consumers. Oncor operates the largest distribution and transmission system in Texas, providing power to 3 million electric delivery points over more than 102,000 miles of distribution and 14,000 miles of transmission lines. While Oncor is a subsidiary of Energy Future Holdings Corp., Oncor is a separate entity with a separate board that is comprised of a majority of independent directors.