The Williams Companies completed the sale of another major asset Tuesday. Its 54.6% stake in Williams Energy Partners (WEG) went to a Delaware limited partnership recently formed by the private equity firms Madison Dearborn Partners LLC and Carlyle/Riverstone Global Energy and Power Fund II LP for $510 million in cash and $570 million in assumed debt.

Williams said it expects to recognize a pre-tax gain of $270-285 million, which will be reported in discontinued operations in its second quarter financial results. The deal completes the $2.75 billion in asset sales Williams had planned for 2003, which have included the $1.1 billion sale of Texas Gas Transmission in May to a subsidiary of Loews Corp., the $400 million sale of western production properties in May, the $455 million sale of its Memphis, TN, refining operations to Premcor Inc. in March and numerous other asset sales over the last few months.

CEO Steve Malcolm conceded in May that he would be running a much smaller and more simplified company going forward. Nevertheless, he said, the Tulsa-based operation retains a solid platform for profitability and cash-flow generation.

“Williams has completed asset sales in a thoughtful, orderly manner. Each sale, along with our recent financings, are precise steps toward a stronger foundation for a redefined Williams,” Malcolm said on Tuesday.

More than 800 Williams employees provided general, administrative and operations support to Williams Energy Partners at the time the transaction closed. Nearly all of those individuals will become employees of the buyer or the partnership, the company said.

However, the members of the board of directors of WEG’s general partner have resigned, except for CEO Don Wellendorf, who will continue to serve as a director. In addition to Wellendorf, the newly elected directors of the board are Justin Huscher and Patrick Eilers, both affiliated with Madison Dearborn Partners LLC, and Pierre Lapeyre Jr. and David Leuschen, both affiliated with Carlyle/Riverstone. The buyer also intends to expand the size of the board and appoint three additional directors who satisfy the “independence” requirements of the NYSE and the SEC as soon as practicable.

WEG also said it expects to introduce a new name for the partnership within 90 days.

Wellendorf said WEG expects the investment firms will provide “additional momentum for the partnership’s growth. We remain focused on our goal of growing cash distributions by at least 10% per year while maintaining safe and efficient operations.”

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