Energy Transfer sells 329,299,267 of its convertible preferred units

Units will convert to company’s common units at $6.56 per common unit

By Devika Patel

Knoxville, Tenn., March 10 – Energy Transfer Equity LP settled a private offering of series A convertible preferred units on March 8, according to an 8-K filed Thursday with the Securities and Exchange Commission.

The company issued 329,299,267 units to holders of common units who agreed that they will not receive distributions on the common units for up to nine quarters starting with the quarter ending March 31.

The units convert to common units at $6.56, which is a 78.99% discount to the March 7 closing share price of $31.22 and is also 95% of the five-day volume-weighted average closing price of the common units, the company noted in the filing. The units will pay a quarterly distribution of $0.11 per unit.

Company chairman Kelcy Warren participated.

Proceeds saved from not making distributions will be used for general partnership purposes.

Energy Transfer said: “The plan reflects the partnership’s broader strategy to be proactive in maintaining its credit rating and enhancing its liquidity position.”

Dallas-based Energy Transfer Equity is a master limited partnership that owns the general partner and 100% of the incentive distribution rights of Energy Transfer Partners, LP and energy gathering and transportation company Sunoco, LP.

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