Attached files
file | filename |
---|---|
EX-2.1 - EX-2.1 - El Paso Pipeline Partners, L.P. | h71729exv2w1.htm |
EX-99.3 - EX-99.3 - El Paso Pipeline Partners, L.P. | h71729exv99w3.htm |
EX-99.2 - EX-99.2 - El Paso Pipeline Partners, L.P. | h71729exv99w2.htm |
EX-99.1 - EX-99.1 - El Paso Pipeline Partners, L.P. | h71729exv99w1.htm |
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 24, 2010
El Paso Pipeline Partners, L.P.
(Exact name of registrant as specified in its charter)
Delaware | 001-33825 | 26-0789784 | ||
(State or other jurisdiction of | (Commission | (IRS Employer | ||
incorporation) | File Number) | Identification No.) |
El Paso Building | ||
1001 Louisiana Street | ||
Houston, Texas | 77002 | |
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: (713) 420-2600
Not Applicable
(Former name or former address, if changed since last report.)
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions:
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
TABLE OF CONTENTS
Table of Contents
Item 1.01 Entry into a Material Definitive Agreement.
Contribution and Exchange Agreement
On March 24, 2010, El Paso Pipeline Partners, L.P. (the Partnership) entered into the
Contribution and Exchange Agreement (the Agreement) with El Paso Pipeline GP Company, L.L.C. (the
General Partner), El Paso Pipeline LP Holdings, L.L.C. (Holdings), El Paso Pipeline Partners
Operating Company, L.L.C. (the Operating Company), El Paso Corporation (El Paso), El Paso Elba
Express Company, L.L.C. (Elba Express), Southern LNG Company, L.L.C. (SLNG), El Paso Pipeline
Corporation (EPPC) and El Paso Pipeline Holding Company, L.L.C. (EPP Holdco). Pursuant to the
Agreement, El Paso, EPPC, EPP Holdco, the General Partner and Holdings (collectively, the
Contributing Parties) agreed to sell to the Partnership (together with the Operating Company, the
Partnership Parties) a 51% member interest in Elba Express (the Elba Express Interest) and a
51% member interest in SLNG (the SLNG Interest) in exchange for aggregate consideration of $810
million.
Upon the closing of the transactions contemplated by the Agreement, the following, among other
things, will occur: (i) the parties to the Agreement will enter into a Contribution, Conveyance and
Assumption Agreement (the Conveyance Agreement) pursuant to which the Elba Express Interest and
the SLNG Interest will be contributed from the Contributing Parties to the Partnership Parties and
(ii) an Amended and Restated Limited Liability Company Agreement of each of Elba Express and SLNG
will be entered into to reflect the contributions of the Elba Express and SLNG Interests to the
Partnership Parties. After giving effect to the transactions contemplated by the Agreement, the
Contributing Parties will own 49% of Elba Express and 49% of SLNG and the Partnership Parties will
own 51% of Elba Express and 51% of SLNG, all in the form of member interests.
The closing of the Agreement is subject to the satisfaction of a number of customary conditions,
all of which the Partnership believes will be satisfied. Obtaining financing by the Partnership is
a condition to the closing. The Partnership expects the closing to
occur on or prior to March 31,
2010. The aggregate consideration paid by the Partnership to the Contributing Parties for the Elba
Express Interest and the SLNG Interest will consist of approximately
$661 million (the Cash
Consideration) and 5,346,251 newly issued common units (the Unit Consideration) representing
limited partner interests in the Partnership (Common Units). The number of Common Units was
determined based upon a price of $27.87 representing the highest volume weighted average price over
certain specified trading periods ending on March 23, 2010. The Agreement allows the Partnership to
adjust the amounts of the Cash Consideration and the Unit Consideration. The Partnership intends
to use debt proceeds and borrowing from the Partnerships existing revolving credit facility to
fund a portion of the Cash Consideration. The Partnership will also use approximately $236 million
of cash-on-hand from its January 2010 public offering of common units to fund the remainder of the
Cash Consideration. Additionally, concurrently with the issuance of the Common Units in connection
with the Unit Consideration, the General Partner will contribute to the Partnership approximately
$3 million in order to maintain its two percent general partner interest in the Partnership. This
$3 million contribution to the Partnership by the General Partner will also be used to fund the
Cash Consideration. The issuance of Common Units as partial consideration for the Elba Express
Interest or SLNG Interest will be made in reliance upon the exemption from the registration
requirements of the Securities Act of 1933, as amended (the Securities Act), afforded by Section
4(2) of the Securities Act.
Pursuant to the Agreement, the Contributing Parties agreed to indemnify the Partnership Parties,
their subsidiaries and their respective securityholders, directors, officers, and employees, and
the officers, directors and employees of the General Partner (the Partnership Indemnified
Parties) against certain losses resulting from any breach of the Contributing Parties, Elba
Express or SLNGs representations, warranties covenants or agreements. The Partnership Parties
agreed to indemnify the Contributing Parties, Elba Express, SLNG, their affiliates (other than any
of the Partnership Indemnified Parties) and their respective securityholders, directors, officers,
and employees against certain losses resulting from any breach of the Partnership Parties
representations, warranties, covenants or agreements. Certain of the parties indemnification
obligations, considered collectively, are subject to a deductible of $8.1 million and are subject
to a ceiling amount of approximately $121.5 million. In addition, the parties indemnification
obligations for certain tax liabilities and losses are not subject to the deductible or the ceiling
amount.
The description of the Agreement in this report is qualified in its entirety by reference to the
copy of the Agreement, including the form of Conveyance Agreement attached as an exhibit thereto,
filed as exhibit 2.1 to this report, which is incorporated by reference into this report in its
entirety.
Relationships
Currently, El Paso indirectly owns 55,326,397 Common Units and 27,727,411 subordinated units
representing limited partner interests in the Partnership, which in the aggregate represent a 60.2%
limited partner interest in the Partnership. The General Partner serves as the general partner of
the Partnership, holding a two percent general partner interest and incentive distribution rights
in the Partnership. Each of the Partnership, the General Partner, Holdings, the Operating Company,
Elba Express, SLNG, EPPC and EPP Holdco is an indirect subsidiary of El Paso. After giving effect
to the contributions in connection with the
Table of Contents
Agreement, El Paso will directly or indirectly own (i) 100% of the General Partner, which allows it
to control the Partnership and own the two percent general partner interest and incentive
distribution rights in the Partnership, (ii) approximately
60,672,648 Common Units (subject to
adjustment of the Unit Consideration) and 27,727,411 subordinated units representing an aggregate
61.6 % limited partner interest in the Partnership, (iii) 100% of Holdings, (iv) a 49% member
interest in Elba Express and a 49% member interest in SLNG, (v) a 42% general partner interest
in Colorado Interstate Gas Company (CIG) and (vi) a 75 % general partner interest in Southern
Natural Gas Company (SNG). Further, certain officers and directors of the General Partner serve
as officers and/or directors of El Paso, the Partnership and the Operating Company. The
Partnership is a party to an omnibus agreement with El Paso and its affiliates that governs the
Partnerships relationship with El Paso and its affiliates regarding (i) reimbursement of certain
operating and general and administrative expenses; (ii) indemnification for certain environmental
contingencies, tax contingencies and right-of-way defects; reimbursement for certain expenditures;
and (iv) the guaranty by El Paso of certain expenses under intercompany agreements related to the
Elba Island LNG terminal expansion.
In addition, each of the Partnership, Elba Express, SLNG, CIG and SNG currently have and will have
in the future other routine agreements with El Paso or one of its subsidiaries that arise in the
ordinary course of business, in addition to the Partnerships Agreement of Limited Partnership, the
Elba Express Limited Liability Company Agreement, the SLNG Limited Liability Company Agreement, the
CIG General Partnership Agreement and the SNG General Partnership Agreement, respectively, such as
agreements for services and other transportation and exchange agreements and interconnection and
balancing agreements with other El Paso pipelines.
The conflicts committee of the board of directors of the General Partner unanimously recommended
approval of the terms of the Partnerships acquisition of the Elba Express Interest and the SLNG
Interest. The conflicts committee retained independent legal and financial advisors to assist it
in evaluating and negotiating the transaction. In recommending approval of the transaction, the
conflicts committee based its decision in part on an opinion from the committees independent
financial advisor that the consideration to be paid by the Partnership pursuant to the Agreement is
fair, from a financial point of view, to the holders of Common Units of the Partnership, other than
the General Partner and its affiliates. The board of directors of the General Partner unanimously
approved the terms of the Partnerships acquisition of the Elba Express Interest and the SLNG
Interest.
Item 3.02 Unregistered Sales of Equity Securities.
The information set forth under Item 1.01 above with respect to the issuance by the
Partnership of Common Units pursuant to the Agreement is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On
March 25, 2010, the Partnership issued a press release announcing
that it had entered into the Agreement, as described above in Item
1.01. A copy of the press release is attached hereto as Exhibit 99.1
to this Current Report.
Item 8.01 Other Events.
Attached as Exhibit 99.2 are unaudited pro forma condensed consolidated financial statements
as of December 31, 2009 and for the years ended December 31, 2009, 2008 and 2007. These financial
statements reflect the effects of our consolidation of SLNG and Elba Express following the
acquisition, as well as the directly related financing transactions. Attached as Exhibit 99.3 is a
summary of the assets, customer contracts and existing debt of each of SLNG and Elba Express. Also
included in Exhibit 99.3 is a description of the LLC Agreements that will be entered into upon the
closing of the acquisition.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Number | Description | |
2.1#
|
Contribution Agreement | |
99.1
|
Press Release | |
99.2
|
Pro Forma Financial Information | |
99.3
|
Summary of Pending SLNG/Elba Express Acquisition |
# | Pursuant to Item 601(b)(2) of Regulation S-K, the registrant agrees to furnish supplementally a copy of any omitted exhibit or schedule to the Securities and Exchange Commission upon request. |
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
EL PASO PIPELINE PARTNERS, L.P. | ||||||||
By: | El Paso Pipeline GP Company, L.L.C., | |||||||
its General Partner | ||||||||
Date: March 25, 2010
|
By: | /s/ John R. Sult | ||||||
Name: | John R. Sult | |||||||
Title: | Senior Vice President and Chief
Financial Officer (Principal Financial Officer) |
Table of Contents
EXHIBIT INDEX
Exhibit Number | Description | |
2.1#
|
Contribution Agreement | |
99.1
|
Press Release | |
99.2
|
Pro Forma Financial Information | |
99.3
|
Summary of Pending SLNG/Elba Express Acquisition |
# | Pursuant to Item 601(b)(2) of Regulation S-K, the registrant agrees to furnish supplementally a copy of any omitted exhibit or schedule to the Securities and Exchange Commission upon request. |