HOUSTON - Plains All American Pipeline, L.P. and Vulcan Capital on Aug. 28 announced that they have executed definitive agreements under which a subsidiary of PAA will acquire Vulcan Capital's 50 percent indirect interest in PAA Natural Gas Storage, LLC (PNGS).
The aggregate purchase price of $220 million consists of $90 million cash, 1.9 million PAA common units valued at $90 million and deferred contingent cash consideration of up to $40 million. The contingent consideration is subject to achievement of certain events and performance milestones expected to occur over the next several years. The transaction is expected to close on Sept. 3, 2009.
As a result of the transaction, PAA will own all of the natural gas storage business and related operating entities, which will be accounted for on a consolidated basis.
The Partnership has historically accounted for its 50 percent indirect interest in PNGS under the equity method. At closing, PAA will repay the joint venture's outstanding project finance debt using joint venture cash and borrowings under its revolving credit facility. As of June 30, 2009, the joint venture had approximately $450 million of debt and approximately $52 million of cash.
No comments:
Post a Comment