Grant D Billing

Source: Technology Digital

Date :11/28/2007 11:06:12 AM

Grant D Billing is definitely the person to ask if you want to know about that peculiar animal, the Canadian income fund. John O’Hanlon asked him what makes that model so special.

Billing is 55 years old, a Calgary native born and bred. He is a science graduate from the University of Calgary, where he specialized in computing, however after graduating the world of finance and business quickly gained his attention: he joined a local accountancy firm and completed his Chartered Accountant training there. “I stayed in public practice for a few years, and then I moved into the coal mining business with the Fording Canadian Coal Trust, the largest coal producer in Canada.”

Knowledge

Billing had been captured by the energy sector. After Fording he moved to North Canadian Oil as CFO and then Chief Operating Officer. In 1990 he took his by now considerable experience to the Sceptre Resources Limited, one of the largest Canadian oil and gas exploration, which had been struggling to control its costs at a time of declining reserves. “It was a major turnaround situation. I had to go in and fix it up,” he explains laconically. That job took four years, then he went on to Norcen Energy, one of the biggest oil and gas exploration and production companies in North America.

Billing served as President and CEO of Norcen for a further four years until 1998, and it was out of that company that the Superior Plus Income Fund sprang. “Norcen owned some disparate assets that weren’t really part of its core business, and one of these was Superior Propane – we were looking for a way to monetise that business, which had very stable cash flows and was generating a lot of cash that it needed to do something with. At the time the income trust structure was a fairly new development in Canada, and it seemed tailor made for Superior Propane.” Norcen had in fact created Canada’s very first income fund when it established the Labrador Iron Ore income fund based on a royalty and equity interest it had in a large iron ore deposit in Labrador.

Leveraging the trust model

Superior Propane was accordingly taken into the income trust structure in 1996, and in 1998 when its shareholders decided to sell Norcen, Billing and a couple of colleagues bought a controlling interest and the management rights to Superior Propane Income Fund. “Our strategy at the time was to seek good high quality assets that would fit well into the income trust structure – very stable businesses, predictable cash flow, low maintenance capital – basically businesses that generated a lot of cash.” It now generates some 45 percent of the entire group sales. Propane may only account for two percent of the country’s energy but it is the only choice for the majority of rural dwellers, he says. “However it is growing in line with the economy, and our opportunity in propane is definitely going to expand...”

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