Provident Energy Closes Midstream NGL Buy From EnCana CALGARY
-(Dow Jones)-
Provident Energy Trust (PVX) has completed the acquisition of the natural gas liquids business of EnCana Corp. (ECA) for about C$697 million (US$605 million), plus working capital and other adjustments.
In a news release, Provident said the acquisition was partially financed by a bought-deal short-form prospectus offering of 21.8 million subscription receipts at C$12.60 each, for proceeds of about C$275.1 million and C$150.0 million principal amount of 6.50% convertible extendible unsecured subordinated debentures.
The offering of subscription receipts and debentures was sold to a syndicate of underwriters led by National Bank Financial Inc., BMO Nesbitt Burns Inc. and Scotia Capital Inc.
The remaining portion of the purchase price was financed through Provident's credit facilities.
With the completion of this acquisition, Provident said the maturity date of the debentures has been automatically extended to April 30, 2011 from Jan. 25, 2006. The debentures have a coupon rate of 6.50% and are convertible into trust units of Provident at C$14.75 a unit.
The trust also said Murray N. Buchanan, former president and chief executive of Kinetic Resources (LPG), has been named co-president, Provident Midstream. He will co-lead the new Midstream business unit with Andrew Gruszecki.
Separately, EnCana said it sees an after-tax gain of about US$400 million on the sale. It said after-tax proceeds of about US$565 million will be directed to debt reduction and potentially the continuation of EnCana's buyback program.
Provident Energy Trust owns and manages an oil and gas production business and a natural gas liquids midstream services and marketing business.
EnCana is a major oil and gas company.
Company Web Site: providentenergy.com
-Judy McKinnon, Dow Jones Newswires; 416-306-2100 (END)
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