JACKSON, Mich., May 13, 2003 — CMS Energy and the Southern Union Co. announced that they have entered into an amendment to their definitive agreement for the sale of CMS Panhandle Companies.
The amendment provides that AIG Highstar Capital, L.P. will withdraw from the transaction, leaving Southern Union as the sole purchaser of the interstate gas pipeline business and accompanying subsidiaries. The parties expect the amendment will expedite regulatory approval of the transaction and anticipate closing by June 30, 2003.
AIG Highstar Capital’s withdrawal from the transaction should help resolve regulatory issues that arose as a result of AIG Highstar Capital’s ownership of Southern Star Central Gas Pipeline, Inc.
The agreement provides for CMS Energy to receive three million shares of Southern Union common stock and about $584 million in cash. The original definitive agreement provided for a cash payment of about $662 million. About $1.166 billion of debt will be assumed by Southern Union in the transaction. CMS Energy will use the cash proceeds of the transaction and from the ultimate sale of the Southern Union common stock to accelerate debt reduction.
Ken Whipple, CMS Energy’s chairman and chief executive officer, said the modified agreement should eliminate the uncertainty connected with the regulatory issues and permit a closing soon after the FTC has approved the transaction.
“We are committed to executing our asset sales plan and this modified agreement clears the way for the CMS Panhandle sale to close on schedule. This sale is a significant step forward in our efforts to increase our financial flexibility, strengthen our balance sheet, and preserve our liquidity,” Whipple said.
The CMS Panhandle Companies include CMS Panhandle Eastern Pipe Line Company, CMS Trunkline Gas Company, CMS Trunkline LNG Company, which operates an LNG terminal complex at Lake Charles, La., and the CMS Sea Robin Pipeline Company.
CMS Energy is an integrated energy company, which has as its primary business operations an electric and natural gas utility, natural gas pipeline systems, and independent power generation.
For more information on CMS Energy, please visit our web site at: www.cmsenergy.com