Fortis pursuing compensation from Belize

Ashley Fitzpatrick
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Company records 12th year of record earnings despite expropriation

At its annual general meeting in St. John's Friday, Fortis cited record profits, a deal on the horizon to break new ground in the United States and a developing $900-million hydro project in British Columbia.

Despite all this, when the meeting was turned over to questions from shareholders, the first question was on an entirely different subject - Fortis interests in Belize.

In June 2011, Belize Electricity Ltd. - the primary distributor of electricity in Belize, with a customer base of about 77,000 - was expropriated by the Government of Belize.

Fortis held a 70 per cent ownership stake in the company at the time and is still seeking compensation.

Asked one shareholder, "Are we going to get our money back?"

"Good question," said Stan Marshall, Fortis president and CEO. "Your guess is as good as mine."

Belize Electricity is a power distributor, but does not produce the power, instead purchasing it from several sources. One of those sources is Belize Electric Co. Ltd. - a hydro power company in which Fortis continues to hold stake.

Keeping hotels

"There have been ongoing difficulties on the regulatory front there," Marshall said, adding Fortis is working to sort through outstanding issues.

Building for the future

Fortis spent $1.2 billion on capital projects in 2011.

About 80 per cent of the company's estimated $1.3 billion in capital spending in the coming year is expected to be in Western Canada, fueled in part by continued work on the $900 million Waneta hydroelectric expansion project.

"It's on time, on budget," Marshall said of the project.

SNC-Lavalin holds the design-build contract for the development.

When completed, under a 40-year agreement, Fortis will operate and maintain the hydro facility and the output will be sold to Columbia Power Corporation and Columbia Basin Trust (with a 32.5 per cent and 16.5 per cent stake in the project respectively).

Staying in the hotel business

One of the shareholders attending the Fortis annual general meeting asked about the company interest in hotels, asking if the company had considered backing off from that work to focus more on utilities.

Fortis maintains 22 hotels in eight provinces and commercial retail and office spaces, mostly in Atlantic Canada.

Marshall said the properties were not a heavy burden for management and were also profitable for the company.

"I don't foresee us disposing of the property company in the near future," he said.

Fortis finances

Fortis has marked record earnings for the 12th consecutive year - $318 million in 2011.

The total in 2010 was $285 million. In 2009, it was $262 million.

For shareholders, the continued rise has resulted in a value of $1.75 per common share in 2011, versus $1.65 in 2010 or $1.54 in 2009.

Heading into the rest of the year, Marshall said Fortis will continue to seek out potential utility acquisitions, but the current focus is on closing a deal to acquire CH Energy Group Inc. based in Poughkeepsie, New York.

The deal, first announced Feb. 21 of this year, will come at a purchase price of US$1.5 billion, including the assumption of about US$500 million of debt.

A vote on the deal, by CH Energy Group Inc. shareholders, is expected before the end of June.

Fortis is expecting the deal to close before 2013.

Fortis is parent to Newfoundland Power and Fortis Properties and maintains its head office in St. John's.

Organizations: Belize Electricity, Belize Electric Co., SNC-Lavalin Columbia Power Columbia Basin Trust CH Energy Group Inc. Newfoundland Power

Geographic location: Belize, St. John's, United States British Columbia Western Canada Atlantic Canada Poughkeepsie, New York

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Recent comments

  • Don II
    May 07, 2012 - 08:32

    It appears that the Government of Belize must have thought that since Fortis is a Newfoundland based company that being expropriated would not be a surprise. After all, the Government of Newfoundland expropriated Abitibi because the company did not do what the Government of Newfoundland wanted. In Cupids, the Government of Newfoundland expropriated private property to create the Cupids Cove Plantation Provincial Historic Site. Funny enough, no place called the Cupids Cove Plantation is ever mentioned anywhere in the historic record of Newfoundland. The Government created by politically motivated expropriation, an historic site to commemorate a place that never existed in Newfoundland history! The message that politically motivated expropriation sends to international business is very negative. No capitalist corporations based in democratic nations will invest in any Country or Province where the possibility of being politically expropriated exists. It is possible that a number of shareholders in Fortis are Newfoundland politicians and bureaucrats. What goes around comes around!

  • Brad
    May 06, 2012 - 17:57

    Hey Fortis! Why don't you try passing on some of your record profits to its workers! You know, the people that make it happen!

  • John Smith
    May 06, 2012 - 10:10

    Fotis is a great NL company, we should all be very proud that they are so successful, and have decided to remain based in NL.

  • John
    May 06, 2012 - 09:26

    Time to end the NL Power monopoly with respect to the distribution.

  • David
    May 05, 2012 - 08:55

    Put Danny on the case...he's an expert.