01—Abstract
Summary
Summary of the 8-K filed January 2, 2024. Cited figures are marked; the original filing is the authoritative source.
NiSource Inc. reported on Form 8-K that it closed on December 31, 2023 the issuance of a 19.9%a indirect equity interest in its wholly-owned subsidiary Northern Indiana Public Service Company LLC (NIPSCO) to BIP BLUE BUYER L.L.C., an affiliate of Blackstone Infrastructure Partners.
The investor paid $2,161,940,000b in cash as a capital contribution into NIPSCO Holdings II LLC, and NiSource retains an 80.1% controlling indirect equity interest in NIPSCO. Under the Amended and Restated LLC Agreement entered into at closing, the investor will provide up to $250,000,000 in additional capital contributions over three years, backed by an Equity Commitment Letter from an affiliate.
The investor may appoint two of seven Board directors while it holds at least a 17.5%c Percentage Interest, and the agreement includes investor approval rights over certain major actions, along with exit rights and transfer provisions. According to the press release furnished as Exhibit 99.1, NiSource intends to use the capital to support NIPSCO's growth, strengthen its balance sheet, and fund capital needs tied to the renewable generation transition, and it reaffirmed its consolidated credit, earnings and growth commitments through 2028.
02—Key points
Key Highlights
- Closed on December 31, 2023: Blackstone Infrastructure Partners affiliate acquired a 19.9% indirect equity interest in NIPSCO Holdings II LLC.
- Investor paid $2,161,940,000 in cash as a capital contribution; NiSource retains an 80.1% controlling indirect equity interest in NIPSCO.
- Investor committed up to $250,000,000 of additional capital contributions over three years, backed by an Equity Commitment Letter.
- Investor may appoint two of seven Board directors while holding at least a 17.5% Percentage Interest; five directors are appointed by NiSource.
- LLC Agreement includes investor protections requiring Investor approval for certain major Holdings II actions, plus exit and transfer rights.
- NiSource states the transaction strengthens its balance sheet, supports its financing plan, and has no impact on NIPSCO's strategic direction; it reaffirmed credit, earnings and growth commitments through 2028.
- NIPSCO targets 0% coal-fired generation mix by 2028, compared with 75% in 2018, and intends to retire all coal-fired generation by the end of 2028.
03—Questions
Frequently Asked Questions
How much capital did NiSource receive from the transaction?
Investor made a capital contribution of $2,161,940,000 in cash to NIPSCO Holdings II LLC at closing, in exchange for a 19.9% indirect equity interest.
Does NiSource still control NIPSCO after the transaction?
Yes. Upon closing, NiSource owns an 80.1% controlling indirect equity interest in NIPSCO, and the Investor owns the remaining 19.9%.
What additional funding obligations does the investor have?
The investor will provide up to $250,000,000 in additional capital contributions over a three-year period after closing, backed by an Equity Commitment Letter from an affiliate of the investor.
What governance rights does the investor receive?
The investor can appoint two of the seven directors to the Holdings II Board while it holds at least a 17.5% Percentage Interest. It also has approval rights over certain major actions by Holdings II.
How will NiSource use the proceeds?
According to the press release, NiSource intends to use the capital infusion to support NIPSCO's growth and ability to serve customers, strengthen its balance sheet, and fund ongoing capital needs associated with the renewable generation transition.
04—Continue