Dynegy Drops Bid to Raise Money Through MLP

Dynegy Energy Partners LP, a master limited partnership (MLP) formed last year to raise money for its cash-poor parent, on Friday canceled plans to go public.

In a filing with the Securities and Exchange Commission, Dynegy Inc. said that it had decided to withdraw the initial public offering (IPO) for up to $2.5 billion in debt securities, Class A common stock and other securities. Dynegy had originally filed for the IPO early last year, and had expected approval by the third quarter of 2002 (see Daily GPI, July 1, 2002). Dynegy Energy Partners was formed to distribute and market natural gas liquids.

Dynegy stated in the brief filing that "the registrant believes the withdrawal to be consistent with the public interest and the protection of investors. The registrant represents that no securities have been offered or sold pursuant to the registration statement." Dynegy Energy Partners filed an identical statement with the SEC also on Friday.

An estimated price range for the IPO had never been disclosed. It would have been underwritten by Lehman Brothers Inc. with net proceeds going to repay $167.2 million owed to Dynegy Inc. and its affiliates, according to the filing. Only $1.7 million of the net proceeds were to be kept to use as working capital, while another $14.8 million would fund planned capital expenditures, the filing said. Dynegy and some of its affiliates would be the general partners. The MLP had planned to sell up to 10 million units, including underwriters' over-allotments, in an initial public offering to raise up to $210 million. It even had a New York Stock Exchange listing under "DEP."

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