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June 5 Canadian natural gas and electricity retailer Just Energy Group Inc said it would sell its Ontario-based water heater and air conditioning home services business for $505 million to pay down debt.
The sale will also help Just Energy focus on its core electricity and natural gas businesses across North America and its recently started UK business, the company said.
" ... The priority for management is the reduction of company debt levels," Deb Merril and James Lewis, the company's co-chief executives, said in a statement.
"We examined all of our non-core assets and concluded that the sale of (the business) at this price would allow us to pay down approximately $400 million of our outstanding debt, substantially reducing our leverage."
Just Energy also cut its annual dividend to 50 Canadian cents from 84 Canadian cents. The company said it would pay dividend on a quarterly basis from September.
Just Energy is selling the business, called National Home Services, to Reliance Comfort Ltd Partnership, which rents heating, ventilation and air conditioning equipment, mainly in Ontario and western Canada.
The purchase price includes a debt of $273 million.
RBC Capital Markets and CIBC World Markets were Just Energy's financial advisers, while Fasken Martineau DuMoulin LLP and Davies Ward Phillips & Vineberg LLP were its legal advisers.
Torys LLP was Reliance Comfort's legal adviser.
Just Energy's shares closed at C$6.15 on the Toronto Stock Exchange on Wednesday. (Reporting by Sneha Banerjee and Sayantani Ghosh in Bangalore; Editing by Kirti Pandey)