Summary
ONEOK, Inc. (OKE) has filed an 8-K report detailing significant corporate actions completed on April 6, 2006. The primary event is the completion of a series of transactions resulting in ONEOK's 100% ownership of the general partner interest in Northern Border Partners, L.P. (NBP). These transactions involved the contribution of ONEOK's gathering, processing, and pipelines and storage segments to NBP in exchange for NBP Class B units, and the sale of its natural gas liquids segment to NBP for cash. Additionally, ONEOK acquired the remaining outstanding common stock of Northwest Border, an affiliate of TransCanada Corporation, which held a significant portion of NBP's general partner interest. In conjunction with these asset dispositions and acquisitions, ONEOK entered into a Fifth Amendment to its $1.2 billion credit agreement, primarily to accommodate the NBP transactions. The amendment removed a representation requirement for no material adverse change prior to borrowing and added a covenant regarding control over NBP's management. Furthermore, a Services Agreement was established, obligating ONEOK to provide services to NBP and its subsidiaries, with costs allocated consistently with existing affiliate practices. These strategic moves significantly alter ONEOK's asset base and operational structure, marking a substantial shift in its business focus.
Key Highlights
- 1ONEOK completed transactions to gain 100% ownership of Northern Border Partners, L.P. (NBP) general partner interest.
- 2ONEOK contributed its gathering, processing, pipelines, and storage segments to NBP in exchange for NBP Class B units.
- 3ONEOK sold its natural gas liquids segment to NBP for $1.35 billion in cash.
- 4ONEOK acquired remaining NBP general partner interests by purchasing Northwest Border from TransCanada for $30 million net.
- 5A Fifth Amendment to ONEOK's $1.2 billion credit agreement was executed to facilitate these transactions.
- 6A new Services Agreement was put in place for ONEOK to provide services to NBP and its subsidiaries.
- 7Several key ONEOK executives assumed additional roles within NBP, reflecting the integrated nature of the post-transaction structure.