DALLAS--(BUSINESS WIRE)--Feb. 27, 2013--
Energy Transfer Partners, L.P. (NYSE:ETP)
and Energy Transfer Equity, L.P. (NYSE:ETE)
announced today that their affiliate, Southern Union Company
(Southern Union), has agreed to contribute Southern Union Gathering
Company, LLC, the owner of Southern Union Gas Services, Ltd. (SUGS), to
Regency Energy Partners LP (NYSE: RGP) in exchange for $1.5 billion. The
transaction will include a 5,600-mile gathering system in West Texas and
New Mexico and approximately 500 million cubic feet per day of
processing and treating facilities. The deal is expected to close in the
second quarter of 2013, subject to approval under the Hart-Scott-Rodino
Antitrust Improvements Act and other customary closing conditions.
In exchange for the assets, Southern Union will receive $750 million of
newly issued Regency common units, $150 million of new Class F units,
and $600 million in cash. ETE, which owns the general partner and
incentive distribution rights (IDR) of Regency, has agreed to forego all
IDR payments from Regency on the newly issued Regency units for the
first eight consecutive quarters following the closing. The Class F
units will not receive any cash distributions for eight consecutive
quarters following the closing and thereafter will convert to Regency
common units, receiving distributions at the prevailing rate. In
addition, ETP has agreed to forego the $10 million annual management fee
paid by Regency for the same time period post-transaction close.
Following discussions with the credit rating agencies, ETP and ETE have
received feedback that the transaction will have no effect on existing
credit ratings at any of the entities. Additionally, the cash proceeds
from the sale of SUGS will be utilized to repay debt, including
borrowings outstanding under Southern Union’s revolving credit facility.
The agreement between Southern Union and Regency is another important
step in executing on ETE’s and ETP’s commitment to simplify their
structures and optimize their asset portfolios. The announcement of the
deal with Regency follows the December announcement by ETE and ETP that
Southern Union’s local distribution companies, Missouri Gas Energy and
New England Gas Company, would be sold.
Credit Suisse Securities (USA) LLC acted as sole financial advisor to
ETP Holdco Corporation, a subsidiary of ETP and ETE and the parent of
Southern Union Company.
Energy Transfer Partners, L.P. (NYSE:ETP)
is a master limited partnership owning and operating one of the largest
and most diversified portfolios of energy assets in the United States.
ETP currently has natural gas operations that include approximately
24,000 miles of gathering and transportation pipelines, treating and
processing assets, and storage facilities. ETP also owns general partner
interests, 100% of the incentive distribution rights, and a 32.4%
limited partnership interest in Sunoco Logistics Partners L.P.
(NYSE:SXL), which operates a geographically diverse portfolio of crude
oil and refined products pipelines, terminalling and crude oil
acquisition and marketing assets. ETP also holds a 70% interest in Lone
Star NGL, a joint venture that owns and operates natural gas liquids
storage, fractionation and transportation assets in Texas, Louisiana and
Mississippi. In addition, ETP holds controlling interest in a
corporation (ETP Holdco Corporation) that owns Southern Union Company
and Sunoco, Inc. ETP’s general partner is owned by ETE. For more
information, visit the Energy Transfer Partners, L.P. website at www.energytransfer.com.
Energy Transfer Equity, L.P. (NYSE:ETE)
is a master limited partnership, which owns the general partner and 100%
of the incentive distribution rights (IDRs) of Energy Transfer Partners,
L.P. (NYSE:ETP) and approximately 50.2 million ETP limited partner
units; and owns the general partner and 100% of the IDRs of Regency
Energy Partners LP (NYSE:RGP) and approximately 26.3 million RGP limited
partner units. ETE also owns a non-controlling interest in a corporation
(ETP Holdco Corporation) that owns Southern Union Company and Sunoco,
Inc. The ETE family of companies owns approximately 69,000 miles of
natural gas, natural gas liquids, refined products, and crude pipelines.
For more information, visit the Energy Transfer Equity, L.P. web site at www.energytransfer.com.
This press release may include certain statements concerning
expectations for the future that are forward-looking statements as
defined by federal law. Such forward-looking statements are subject to a
variety of known and unknown risks, uncertainties, and other factors
that are difficult to predict and many of which are beyond management’s
control. An extensive list of factors that can affect future results are
discussed in the Partnerships’ Annual Reports on Form 10-K and other
documents filed from time to time with the Securities and Exchange
Commission. The Partnerships undertake no obligation to update or revise
any forward-looking statement to reflect new information or events.
The information contained in this press release is available on our
website at www.energytransfer.com.
Source: Energy Transfer
Vicki Granado, 214-599-8785