With project in doubt, Kinder Morgan shareholders vote to sell Trans Mountain pipeline to Ottawa

Kinder Morgan Canada shareholders voted overwhelminglyThursday to approve the sale of the Trans Mountainpipeline and expansion project to the Canadian government for $4.5 billion.

The vote came just 30 minutes after the Federal Court of Appealquashed the federal government's approvals to build the massive project, handing a huge victory to Indigenous groups and environmentalists opposed to it.

The company held a special meeting Thursday morning at a Calgary conference centre where shareholders voted by a 99.98 per cent margin to approve theproposed sale to the federal government.

The brief meeting was chaired by the CEO of both Kinder Morgan Canada Inc., and its U.S. parent, Steven Kean.

A short time later, the Calgary-based company issued a statement saying it istaking measures to suspend construction-related activities on the project, but that it remains committed to the project.

A total of 324,578,862 shares were voted in person and by proxy at the meeting, representing almost 88 per cent of theshares entitled to vote, the company said in a release.

Kinder Morgan Canada says both parties expect to close the transaction as early asFriday.

• Federal Court of Appeal quashes construction approvals for Trans Mountain, leaving project in limbo

On May 29, Ottawa announced it had struck a deal with Kinder Morgan Canada to purchase the Trans Mountain pipeline and related infrastructure for $4.5 billion and would spend billions more to build the controversial expansion.

The company had told the federal governmentit needed clarity on a path forward for the contentious projectby May 31 or it would walk away from construction.

Decision deemed fair to shareholders

In a decision written by Justice Eleanor Dawson, the court found that the National Energy Board's assessment of the project was so flawed that it should not have been relied on by the federal cabinet when it gave its final approval to proceed in November 2016.

The ruling effectively halts construction of the 1,150-kilometre project indefinitely.

Canada's energy sector slammed theruling, with one industry association calling it a "devastating" decision that damages Canada's international reputation and another agreeingworld investors would continue to look at Canada as a place that "can't get its act together."

• Trans Mountain pipeline ruling strikes 'devastating' blow to Canada's global reputation, energy sector warns
• Energy shares fall as top court rules against fed's expansion of Trans Mountain pipeline

Kinder Morgan Canada president Ian Anderson says the company will work with Ottawa todeterminewhat their next steps should be.

"We remain committed to building this project in consideration of communities and the environment, with meaningful consultation with Indigenous Peoples and for the benefit of Canadians," he said.

In July, Kinder Morgan Canada Ltd., said the actual price the federal government will pay for its Trans Mountain pipeline system and expansion project will be hundreds of millions of dollars less than the $4.5 billion it announced in May.

In a regulatory filing with the U.S. Securities and Exchange Commission, the company says it estimates it will have to pay at least $325 million in capital gains taxes to the Canadian government when the deal is concluded.

It saidthat reducedthe "net price" to $4.175 billion.

That filing was designed to advise Kinder Morgan Canada shareholders in advance of their vote on Thursday. An attached report from adviser TD Securities concluded that the deal as negotiated is fair for shareholders.

With files from Reuters and The Canadian Press

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