Crosstex to sell unit for $266 million to Kinder Morgan
01 Sep 2009
US natural gas companies, Crosstex Energy L.P. and its partner, Crosstex Energy Inc, agreed to sell their gas treatment business to Kinder Morgan Energy Partners L.P, one of the largest pipeline transport and storage companies in North America, for $266 million.
Proceeds from the sale will be used to pay down approximately $260 million of the partnership's outstanding debt, a statement issued yesterday said.
Crosstex president and chief executive officer Barry E. Davis said: ''We've taken another step forward in executing our plan to reduce our debt and improve our leverage position. This sale, the recent sale of our Mississippi, Alabama and South Texas assets, and additional asset sales earlier this year have allowed us to reduce our outstanding debt by more than $550 million.''
Crosstex expects to close the transaction in the fourth quarter, subject to approval of the lenders under the partnership's revolving credit and senior note agreements and certain other conditions.
Dallas-based Crosstex Energy L.P. is a midstream natural gas company, operating approximately 5,300km of pipeline, 10 processing plants and other facilities. The partnership has about 6 per cent market share in the US natural gas supplies, providing about 3.2 billion cubic feet per day. The company entered natural gas treatment business a decade ago, and became a leader through organic growth and acquisitions.
Crosstex Energy Inc. owns two per cent general partner interest and 33 per cent limited partner interest in Corsstex Engery L.P.
