10/25/2012 05:48 EDT | Updated 12/25/2012 05:12 EST

Enbridge transfers storage, renewable assets to affiliate for $1.16 billion

CALGARY - Pipeline giant Enbridge Inc. is transferring $1.16 billion in storage and renewable energy assets to its affiliate.

Enbridge Income Fund Holdings (TSX:ENF) is acquiring oil storage facilities in Hardisty, Alta., that can hold about 11 million barrels of crude above and below ground.

The fund is also buying The Greenwich Wind Project near Thunder Bay, Ont., and the Amherstburg and Tilbury solar projects near Sarnia, Ont.

As a result of the deal, Enbridge Inc.'s economic interest in Enbridge Income Fund Holdings will decrease from 69.2 per cent to 67.8 per cent.

"The prospect of acquiring this portfolio of assets is exciting," said John Whelen, president of the fund.

He said the facilities would be a "great fit" as they are underpinned by long-term fixed-price contracts and are sheltered from commodity price and foreign exchange swings.

"If approved by shareholders, the transaction would substantially scale up and further diversify the fund's sources of low risk cash flow, reinforcing its value to investors seeking a steady and predictable payout of cash flow from low-risk energy infrastructure assets," said Whelen.

Related to the acquisition, Enbridge Income Fund Holdings plans to raise $222.2 million through a bought-deal financing led by RBC Capital Markets and CIBC World Markets, which will see it sell nearly 9.6 million subscription receipts at a price of $23.15.

Those proceeds will be paid to Enbridge Inc. in cash, in addition to $582 million in debt, $305 million in additional Enbridge Commercial Trust units and $55 million in common shares.

Shareholders are set to vote on the transaction on December 7.

Meanwhile, Enbridge Income Fund Holdings said Thursday it earned $14.6 million, or 37 cents per share, during the third quarter compared to $6.8 million, or 27 cents per share, during the same period a year earlier.

Revenues for the three months ended Sept. 30 were $14.4 million compared with $8.7 million a year earlier.