8-K/AMaterial AgreementsSecurities & ListingRegulation FD+1

Energy Transfer LP 8-K/A Report, Material Agreement (May 13, 2010)

Filed May 13, 2010For Securities:ETET-PI

Summary

This 8-K/A filing from Energy Transfer Equity, L.P. (ETE), filed on May 13, 2010, details significant strategic transactions aimed at expanding ETE's operations and market presence. The core of the filing revolves around the acquisition of the general partner entities of Regency Energy Partners LP (Regency), a move that will integrate Regency's natural gas gathering, processing, and transportation assets into ETE's portfolio. This acquisition is structured as a private placement where ETE will issue convertible preferred units to Regency's affiliate, GE Energy Financial Services. Additionally, the report outlines a series of related agreements involving Energy Transfer Partners, L.P. (ETP). ETP will transfer its interest in Midcontinent Express Pipeline, LLC (MEP) to ETE, which will then contribute these assets to Regency. These transactions are designed to streamline ETE's asset base, enhance its midstream capabilities, and establish a more integrated operational structure. Investors should note the complex exchange of units and potential future conversions and redemptions tied to the preferred units issued in the Regency acquisition.

Key Highlights

  • 1Energy Transfer Equity (ETE) is acquiring the general partner of Regency Energy Partners (Regency) via a GP Purchase Agreement.
  • 2The acquisition of Regency's general partner is being paid for with 3,000,000 newly issued Series A Convertible Preferred Units of ETE.
  • 3Regency Energy Partners is a publicly traded limited partnership involved in natural gas gathering, processing, and transportation.
  • 4ETE and ETP entered into a Redemption and Exchange Agreement where ETP transfers its stake in Midcontinent Express Pipeline III (ETC III) to ETE.
  • 5ETE will then contribute ETC III and its option for ETC II to Regency in exchange for Regency common units, as per a Contribution Agreement.
  • 6The preferred units issued to Regency's affiliate (GE EFS) have specific conversion terms, redemption options for ETE, and forced redemption/conversion rights for GE EFS upon certain events.
  • 7The transactions aim to enhance ETE's midstream footprint and operational integration with Regency and ETP, with new policies to manage inter-company conflicts of interest.

Frequently Asked Questions

The main purpose is to expand Energy Transfer Equity's (ETE) midstream operations and integrate Regency Energy Partners (Regency) into ETE's structure. This involves acquiring control of Regency's general partner and consolidating ETE's pipeline assets, some of which are currently held by Energy Transfer Partners (ETP), under Regency.

ETE is issuing 3,000,000 newly issued Series A Convertible Preferred Units to Regency GP Acquirer, L.P. (an affiliate of GE Energy Financial Services), which is the seller. These preferred units have specific distribution rights, conversion features, and redemption terms.

ETP is involved in transferring its membership interests in ETC Midcontinent Express Pipeline III (ETC III) to ETE. ETE will then contribute these assets to Regency. ETP also holds common units of ETE that ETE will redeem as part of this exchange.

Yes, the preferred units have a preferential cash distribution of $2.00 per quarter. They are convertible into ETE common units after four years with a premium, and ETE has the option to redeem them after three years. GE EFS also has certain rights to force redemption or conversion upon specific extraordinary events.