Last Thursday, Kinder Morgan Canada, a subsidiary of Kinder Morgan Inc. (NYSE: KMI), filed documents to come public on the Toronto Stock Exchange (TSX). The initial public offering (IPO) was completed Tuesday morning with the sale of 102.94 million restricted voting shares at a price of C$17.00 per share. Underwriters have an overallotment option on an additional 15.44 million shares.

The preliminary filings were made in late April and the final prospectus was filed May 25. That’s pretty quickly as these things go. And the IPO was completed right after a three-day weekend in the United States, not the best day for an IPO typically.

Kinder Morgan Canada trades on the TSX under the ticker symbol KML, and Kinder Morgan retains ownership of about 70% of the Canadian firm’s stock. If the underwriters exercise their overallotment, Kinder Morgan’s percentage of ownership drops to around 66%.

The stock is off to an inauspicious start, trading down about 4.5% in the noon hour at C$16.24. Shares traded as low as C$15.25 earlier this morning.

Gross proceeds from the IPO were expected to reach C$1.75 billion (about U.S.$1.3 billion), and the lion’s share of the funds are directed to the expansion of the Trans Mountain pipeline from its current capacity of 300,000 barrels a day to 890,000 barrels. The federal government and prime minister Justin Trudeau approved the pipeline project earlier this year, but opposition remains.

For one thing, the British Columbia provincial government headed by the Liberal party supported the expansion of the Trans Mountain pipeline, but the party lost a recent election and the winning New Democratic Party (NDP) party has formed a coalition government with the Canada’s Green party. Neither supported the pipeline expansion.

The expansion project already is hampered by at least a dozen legal challenges, all on different grounds, and at least some of the country’s First Nations have also aligned themselves against the project. In its final prospectus, Kinder Morgan Canada even noted:

A prospective investor should carefully consider each and every one of the risk factors set out below. In addition, prospective investors should carefully review and consider all other information contained in this prospectus before making an investment decision. An investment in Restricted Voting Shares should only be made by persons who can afford a significant or total loss of their investment.

This is often just boilerplate. In this case, there are, indeed, significant risks. The biggest may be funding. Gross proceeds of C$1.75 billion are a small part of the overall estimated C$7.4 billion Trans Mountain expansion project.

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