CenterPoint Energy Inc. announced Dec. 2 that it is taking steps to reduce the company’s midstream exposure following the merger Enable Midstream Partners LP and Energy Transfer LP.
CenterPoint’s 53.7 percent ownership share of Enable common units converted into 201 million Energy Transfer common units. The settlement of CenterPoint’s previously announced contingent forward sale for 50 million Energy Transfer common units, representing approximately 25 percent of CenterPoint’s ownership in Energy Transfer common units, was triggered upon the completion of the merger between Enable and Energy Transfer.
CenterPoint also received $5 million in cash in exchange for its Enable general partner interest and Energy Transfer Series G Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred units with a liquidation preference of approximately $385 million in exchange for the $363 million liquidation preference of Enable Series A Fixed-to-Floating Non-Cumulative Redeemable Perpetual Preferred units owned by CenterPoint. With the completion of this transaction, CenterPoint and OGE Energy Corp. have terminated various agreements related to Enable.
“I am excited to share this announcement today. We are now firmly on an accelerated path to reducing our exposure to the midstream industry. This transaction aligns with our newly unveiled 10-year growth strategy that focuses on investing in the footprint of our pure-play regulated business,” said president and CEO Dave Lesar. “As I shared during our 2021 Analyst Day, we are targeting a full elimination of our midstream exposure by the end of 2022.”
Lesar added the CenterPoint has taken decisive actions in the past 18 months to align its interest more closely with those of the company’s shareholders and customers, including refocusing on our core regulated utility businesses.
“Our strategy supports a transition to a cleaner energy future that will drive our industry-leading growth,” Lesar said, “including our previously announced anticipated utility earnings per share growth of 8 percent per year through 2024, and the mid-to-high end of 6 to 8 percent per year from 2025 through 2030, all with no anticipated issuance of equity during this time frame.”
As the only investor-owned electric and gas utility based in Texas, CenterPoint Energy is an energy delivery company with electric transmission and distribution, power generation and natural gas distribution operations that serve more than 7 million metered customers in Arkansas, Indiana, Louisiana, Minnesota, Mississippi, Ohio, Oklahoma and Texas. As of Sept. 30, the company owned approximately $37 billion in assets. With approximately 9,500 employees, CenterPoint Energy and its predecessor companies have been in business for more than 150 years.Tags: CenterPoint Energy, Enable Midstream, energy tran, mergers and acquisitions, Midstream