CCE Completes Purchase of Gas Pipelines Formerly Owned by Enron
CCE Holdings Inc., a joint venture between Southern Union Co. and GE Commercial Finance Energy Financial Services on Wednesday completed its acquisition of 100% of the equity interests in CrossCountry Energy LLC from Enron Corp. CCE paid Enron $2.45 billion in cash and assumed the debt for 7,400 miles of natural gas pipelines with 4.2 Bcf/d of transportation capacity.
CrossCountry owns 100% of Transwestern Pipeline and 50% of Citrus Corp., which owns 100% of Florida Gas Transmission Co. An affiliate of El Paso Corp. owns the remaining 50% of Citrus.
"This acquisition represents several very important milestones for Southern Union," said Southern Union Chairman George L. Lindemann. "We have established a solid and forward-looking partnership with GE Commercial Finance. We have become one of the largest interstate pipeline companies in the country. And, most importantly, we have created a strong foundation of assets to drive our earnings growth."
Southern Union President Thomas F. Karam added that "the real work begins now." He said the company would focus on integrating CrossCountry with Panhandle Energy under a management organization that will be led by Stan Horton, who was named president and COO of the combined pipeline operations.
Horton served as CrossCountry CEO beginning in 2003 and previously served as chairman and CEO of Enron Transportation Services, which included the company's North American pipeline businesses, among other operations. He chaired the Gas Industry Standards Board in 2000, the Interstate Natural Gas Association of America in 2001 and the Natural Gas Council in 2002.
Southern Union funded a portion of its equity investment in CrossCountry through the settlement of a forward sale equity offering, which took place in July 2004. The company received $142 million in proceeds upon the issuance of 8.24 million shares of common stock to affiliates of JP Morgan and Merrill Lynch, joint book-running managers of the offering. JP Morgan served as financial adviser. Southern Union plans to host a special investor call and web cast at 2 p.m. EST next Monday (Nov. 22) to discuss the acquisition and outlook.
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