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Energy Transfer LP 8-K Report, Material Agreement (Mar 5, 2007)

Filed March 5, 2007For Securities:ETET-PI

Summary

Energy Transfer Equity, L.P. (ETE) filed an 8-K on March 5, 2007, to report on two key events. The company announced the completion of a private placement of 5,006,261 common units to a group of institutional investors, raising approximately $160 million before expenses. This issuance was conducted under Section 4(2) of the Securities Act of 1933, indicating a private offering not involving public solicitation. In conjunction with this private placement, ETE also entered into a Registration Rights Agreement with the purchasing investors. This agreement grants these investors the right to require ETE to register their acquired common units for future resale under the Securities Act of 1933. This is a standard provision designed to provide liquidity for investors in private placements.

Key Highlights

  • 1Private placement of 5,006,261 common units completed.
  • 2Raised approximately $160 million in gross proceeds from the private placement.
  • 3Units were sold to a group of institutional investors.
  • 4Issuance was conducted under Section 4(2) of the Securities Act of 1933 (private offering exemption).
  • 5Entered into a Registration Rights Agreement with the investors.
  • 6Registration Rights Agreement allows investors to request ETE to register their units for resale.

Frequently Asked Questions

The primary purpose of this 8-K filing was to report on the completion of a private placement of Energy Transfer Equity, L.P. (ETE) common units to institutional investors and the associated execution of a Registration Rights Agreement.

ETE raised approximately $160 million in gross proceeds from the sale of 5,006,261 common units in this private placement, before deducting any expenses.

Registration Rights are contractual rights granted to investors that obligate the issuer (in this case, ETE) to register the securities for resale by those investors with the SEC. This allows the investors to sell their securities in the public market, subject to SEC rules and regulations.

Companies often conduct private placements to raise capital more quickly and with less regulatory burden than a public offering. The issuance was made under an exemption from registration requirements (Section 4(2) of the Securities Act), which is typical for private sales to sophisticated institutional investors.