HOUSTON, TX--(Marketwire -05/18/12)- El Paso Pipeline Partners, L.P. (EPB) announced today that it has agreed to acquire the remaining 14-percent interest in Colorado Interstate Gas Company, L.L.C. (CIG) and all of Cheyenne Plains Investment Company, L.L.C., which owns Cheyenne Plains Gas Pipeline Company, L.L.C. from El Paso Corporation (EP) for $635 million and the assumption of approximately $242 million of proportional debt.
The transaction, which is expected to close contemporaneously with Kinder Morgan, Inc.'s acquisition of El Paso Corporation, will be immediately accretive to distributable cash flow and is being funded with approximately $571 million of cash from borrowings under EPB's revolving credit facility and $64 million of equity from the issuance of common units to El Paso Corporation. El Paso Corporation will make an approximate $1 million general partner capital contribution to maintain its 2 percent general partner interest in El Paso Pipeline Partners, L.P.
The terms of the transaction were unanimously approved by the Board of Directors of the general partner, El Paso Pipeline GP Company, L.L.C., based in part on the unanimous approval and recommendation of the Board's conflicts committee, which is comprised entirely of independent directors. The conflicts committee engaged Tudor, Pickering, Holt & Co. to act as its independent financial advisor and to render a fairness opinion.
El Paso Pipeline Partners, L.P. is a Delaware limited partnership formed by El Paso Corporation to own and operate natural gas transportation pipelines and storage assets. El Paso Corporation currently owns a 42 percent limited partner interest, and the 2 percent general partner interest in the partnership. Prior to the closing of this transaction, El Paso Pipeline Partners, L.P. owns Wyoming Interstate Company, L.L.C. (WIC), Southern LNG Company, L.L.C. (SLNG), Elba Express Company, L.L.C. (Elba Express), Southern Natural Gas Company, L.L.C. (SNG), and an 86 percent interest in Colorado Interstate Gas Company, L.L.C. (CIG). WIC and CIG are interstate pipeline systems serving the Rocky Mountain region, SLNG owns the Elba Island LNG storage and regasification terminal near Savannah, Georgia, and both Elba Express and SNG are interstate pipeline systems serving the southeastern region of the United States.
Cautionary Statement Regarding Forward-Looking Statements
This release includes forward-looking statements and projections. El Paso Pipeline Partners has made every reasonable effort to ensure that the information and assumptions on which these statements and projections are based are current, reasonable, and complete. However, a variety of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this release, including, without limitation, our ability to complete any acquisitions from El Paso Corporation or the timing of such transactions; the ability of El Paso Corporation to close its merger transaction with Kinder Morgan, Inc.; changes in the availability and cost of capital; and other factors described in El Paso Pipeline Partners' (and its affiliates') Securities and Exchange Commission filings. While these statements and projections are made in good faith, El Paso Pipeline Partners and its management cannot guarantee that anticipated future results will be achieved. Reference must be made to those filings for additional important factors that may affect actual results. El Paso Pipeline Partners assumes no obligation to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made, whether as a result of new information, future events, or otherwise.