Under the terms of the original transaction announced on December 15, 2003, El Paso agreed to sell a 50-percent interest in the general partner of GulfTerra along with 13.8 million GulfTerra common units and certain processing assets for approximately $1 billion in cash. As part of the original transaction El Paso would retain a 50-percent interest in the general partner of the combined Enterprise master limited partnership along with about 13.5 million common units of Enterprise following the close of the merger.
Under the amended agreements, El Paso's retained interest in the general partner of the combined organization has been reduced to 9.9 percent. El Paso will also have the right, beginning six months from closing, to exchange its retained general partner interest for Enterprise common units having an equivalent aggregate cash distribution.
The incremental $370 million in cash received by El Paso at closing will bring its net cash proceeds from the overall transaction to approximately $1.35 billion.
"This transaction allows El Paso to efficiently monetize an asset at an attractive value while retaining an interest in what promises to be a highly successful midstream company," said Doug Foshee, president and chief executive officer of El Paso Corporation. "With the proceeds from this transaction, we have now announced or sold $3.4 billion of assets, putting us within the range of the $3.3 billion to $3.9 billion of asset sales we originally targeted for sale by the end of 2005. While this transaction was not included in our long- range plan, we believe it will provide us added flexibility in meeting the goals of that plan."
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