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Strategy for Growth
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The Fund's objective is to provide a stable and sustainable flow of
Distributable Cash and to increase, where prudent, the amount of
distributions per Trust Unit. Alliance Canada's tolling structure is such
that its cash available for distribution is expected to grow by modest
amounts over the initial five years of the Fund's operation.
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In order to further achieve these growth and stability objectives, the Manager
will pursue a business strategy for the Fund which will involve: (i) using
its representation on the board of the directors of the general partner
of Alliance Canada and its operatorship of the Saskatchewan System to maximize
the efficiency and profitability of its existing assets; (ii) pursuing
organic growth and expansion opportunities through its existing assets and
any assets acquired in the future; (iii) acquiring energy
infrastructure investments from third parties or other related assets that
meet the Fund's acquisition and investment guidelines; and (iv) acquiring
energy infrastructure investments or selected assets held
by Enbridge that may be made available to the Fund and that meet the Fund's
acquisition and investment guidelines.
The Manager believes that Enbridge's extensive experience and profile in the
energy infrastructure business will provide the Fund with a competitive advantage
with respect to identifying acquisition and investment opportunities for the
Fund. In addition, Enbridge's experience in operating energy infrastructure
assets will provide the Fund with the ability to operate such assets.
Acquisition and Investment Guidelines
The Fund intends to pursue an acquisition and investment strategy that will target
energy infrastructure investments or other related assets with well-defined
and long-term streams of cash flows. The Fund's subsidiary entity, Enbridge
Commercial Trust ("ECT") is required to employ the following guidelines in the
review and evaluation of possible acquisitions and investments:
- each asset will be acquired, or an investment therein will be made, only if the Fund believes that the acquisition or investment will result in an increase in Distributable Cash per Trust Unit;
- the expected useful life of each asset will, with regular maintenance and upkeep, be long enough for an investment therein to conform with the Fund's objective of providing sustainable long-term distributions of Distributable Cash per Trust Unit;
- the commercial, contractual or regulatory environment of the asset provides a high degree of definition and predictability to the cash flow generated by the asset to conform with the Fund's objective of providing stable distributions of Distributable Cash per Trust Unit; and
- the acquisition of, or investment in, each asset will be reviewed and approved
by the ECT Trustees (or, in the case of a transaction involving an ECT Trustee
who is not an Independent ECT Trustee, the Manager or any of its affiliates, the
Independent ECT Trustees).
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