(Adds details, shares)
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)