Gibson Energy Inc. (TSE:GEI) is exhibiting growth while maintaining a cash yield, reinforcing the company’s decision to become a dividend-paying Canadian C-Corp when going public in 2011, says A. Stewart Hanlon, President and CEO of Gibson Energy Inc.
“We looked at a number of different sort of vehicles when we starting looking at the IPO. As you can imagine, we had a fair bit of sophisticated assistance around the table helping us to figure out what exactly was the best vehicle and the best structure for us to enter the market. We considered the MLP model, whether to list in the U.S., and we got to a point where we decided the best market for us is as a dividend-paying Canadian C-Corp,” Hanlon said.
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Gibson Energy referenced other companies within the Canadian midstream space that are well-capitalized and successful while still paying a dividend, such as Keyera Corp (TSE:KEY), Inter Pipeline Fund (TSE:IPL.UN) and Pembina Pipeline Corp (PBA), Hanlon says. He also points to Riversone LLC, Gibson Equity‘s owner, playing a significant part in making the IPO a success.
“When Riverstone took us public, they did not sell off any of their shares other than through the greenshoe. They then did about a billion dollars worth of follow-on offerings over the next 10 months in three very rapid secondaries which were well-received by the marketplace, and then, in support of the OMNI transaction, we did a $403 million equity transaction just in October of 2012. We’ve placed about $1.7 billion worth of equity, utilizing this share structure, and that has been successful,” Hanlon said.
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