Boston, MA 06/20/2014 (wallstreetpr) – Enbridge Energy Partners, L.P. (NYSE:EEP) on June 19, 2014 announced that it entered into a Purchase and Sale Agreement with Midcoast Energy Partners, L.P. (NYSE:MEP) for selling the additional 12.6% interest in EEP’s subsidiary called Midcoast Operating, L.P. The amount at which the subsidiary will be sold is $350 million in cash proceeds. The transaction will close on or around July 1, 2014.
Enbridge Energy Partner’s Drop-Down Plans for Midcoast Energy Partners Seen as Pivotal
According to the President of Enbridge Energy Partners, L.P. (NYSE:EEP), Mark Maki, this is the first post initial public offering dropping of the interests in Midcoast Operating. The drop down plan of the company is seen as imperative elements of the funding program of EEP.
The proceeds of the drop-down will be used to source the equity capital required for Enbridge Energy Partners. EEP is in the process of execution of multi-billion dollar liquids pipelines organic growth program.
Statement from Mark Maki
Mark Maki, the President of EEP, said that the best part was that the transaction shall be completed at the same time line for 2014. He added that the company will optimize this timing and size of the transaction of further drop down plans in order to meet mutual objectives of Midcoast Energy Partners as well as EEP.
EEP’s Vested Interest in MEP’s Success
Mark Maki explained that there was a vested interest of the company in the success of Midcoast Energy Partners. Given that Enbridge Energy Partners, L.P. (NYSE:EEP) is the only member of general partner of MEP, it will definitely extract benefit from the growing earnings of MEP as well as cash flows of it via the incentive distribution rights or IDRs. After the deal is closed, Enbridge Energy Partners will be the owner of remaining 48.4% of the non-controlling limited partner interest in its subsidiary, Midcoast Operating, L.P.
