8-KAcquisitions & Dispositions

CENTERPOINT ENERGY INC 8-K Report, Acquisition Completed (Dec 7, 2021)

Filed December 7, 2021For Securities:CNP

Summary

On December 2, 2021, CenterPoint Energy, Inc. (CNP) participated in the completion of the previously announced merger between Enable Midstream Partners, LP (Enable) and Elk Merger Sub LLC, a subsidiary of Energy Transfer LP. This transaction effectively concludes CenterPoint's involvement with Enable Midstream. As part of the merger, CenterPoint Energy's stake in Enable was exchanged for Energy Transfer common units and cash. This strategic move is significant for CenterPoint as it divests its remaining interest in the midstream energy sector, allowing the company to focus more intently on its regulated utility operations in Texas and other service territories. Investors should view this as a step towards streamlining the company's business model and potentially enhancing its financial flexibility. The filing details the exchange of CenterPoint's holdings. Specifically, the company received Energy Transfer common units for its Enable common units at a defined exchange ratio. Furthermore, CenterPoint received $5 million in cash for its interest in Enable's general partner and also exchanged its Enable Series A Preferred Units for newly issued Energy Transfer Series G Preferred Units. This completed divestiture marks a significant milestone for CenterPoint Energy, simplifying its corporate structure and aligning its strategic priorities with its core utility businesses.

Key Highlights

  • 1CenterPoint Energy (CNP) has completed the exchange of its ownership stake in Enable Midstream Partners, LP (Enable) as part of Enable's merger with Energy Transfer LP.
  • 2The transaction involved the exchange of CNP's Enable common units for Energy Transfer common units at a ratio of 0.8595x Energy Transfer common units per Enable common unit.
  • 3CNP received $5 million in cash for its interest in Enable's general partner.
  • 4CenterPoint Energy's Enable Series A Preferred Units were exchanged for approximately $385 million liquidation preference of Energy Transfer Series G Preferred Units, for which CNP paid $363 million.
  • 5This divestiture signifies CenterPoint Energy's exit from its remaining midstream energy investments.
  • 6The completion of this transaction allows CenterPoint Energy to focus on its core regulated utility operations.

Frequently Asked Questions

The main purpose of this 8-K filing is to report the completion of the merger between Enable Midstream Partners, LP and Energy Transfer LP, and to detail CenterPoint Energy's exchange of its remaining ownership stake in Enable as part of this transaction.

CenterPoint Energy exchanged its Enable common units for Energy Transfer common units and received $5 million in cash for its general partner interest. Additionally, its Enable Series A Preferred Units were exchanged for Energy Transfer Series G Preferred Units.

This transaction marks CenterPoint Energy's complete exit from its midstream energy investments, allowing the company to streamline its operations and sharpen its focus on its core regulated utility businesses.

No, CenterPoint Energy did not receive direct cash for its Enable Series A Preferred Units. Instead, these units were exchanged for Energy Transfer Series G Preferred Units with an approximate liquidation preference of $385 million, and CenterPoint had acquired its Enable Series A Preferred Units for $363 million.