CMS Schedules IPO For Oil & Gas Unit
CMS Energy Corp. announced last Wednesday it has filed for an initial
public offering (IPO) in the first quarter next year of up to 49% of stock
in its exploration and production subsidiary, CMS Oil and Gas Co. The sale,
in which CMS hopes to realize $400 million, is part of a "value enhancement"
program announced last month aimed at strengthening its balance sheet.
The filing of an S-1 registration with the Securities and Exchange Commission
adds $300 million of CMS Oil and Gas Co. common stock to $100 million that
had been on file since 1995 under a previous registration.
At the end of the third quarter, CMS O&G had 212 million barrels
of oil equivalent proved reserves, which included 724 Bcf of gas and 91
million barrels of oil. The unit operates in four states and seven foreign
countries. Its third quarter operating earnings were $13 million, up from
$4 million in the third quarter of 1999, due to higher oil and gas prices,
partially offset by lower production resulting from the sale of gas reserves
in Michigan and oil reserves in Ecuador.
CMS also said earlier it plans to accelerate the issuance of $300 million
of CMS Energy common stock, which previously had been planned for mid-year
2001, with the combined actions expected to generate about $800 million
in cash and $450 million in equity. The cash will go to help reduce debt
and will supplement the $1.4 billion asset divestiture program. CMS already
has divested $900 million in assets to help reach that goal (see NGI, Oct. 9). The company's stock price has been
steadily strengthening from a low around $16 in March to $27 and change
at last Wednesday's close.
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