September 29, 2016 / 6:56 PM / 3 years ago

Veresen hires Toronto Dominion Bank for power unit sale, may fetch C$1 billion: sources

TORONTO (Reuters) - Canadian energy company Veresen Inc VSN.TO has hired Toronto Dominion Bank (TD.TO) to sell its power business, which could be worth about C$1 billion ($758.90 million), according to two people familiar with the situation.

The Calgary-based company, which owns energy infrastructure assets in Canada and the United States, said last month that it would sell the division and use the proceeds to fund growth.

The move would also allow Veresen to reduce its debt, as well as focus on its pipeline and midstream businesses.

While no longer seen as core to Veresen’s strategy, the power business is considered attractive as the assets have long-term contracts, providing owners with a steady cash flow stream, the people said, declining to be identified as the matter is not public.

Private equity firms, infrastructure-focused funds and pension funds are seen as potential bidders for the asset, the sources said.

OMERS-backed Borealis and Canadian power companies are also likely to take a close look, one of the sources said.

Veresen did not immediately respond to a request for comment. The company has pipeline, midstream and power assets. It also owns 50 percent of a joint venture with KKR & Co LP (KKR.N) called Veresen Midstream, a natural gas midstream business focused on the Montney region that straddles the Alberta-British Columbia border.

Reporting by John Tilak; Editing by Alan Crosby

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