Fort Chicago To Run Up Debt To Fuel Pipeline
CALGARY -- - Fort Chicago Energy Partners LP said it will issue up to CAN$138 million (US$88 million) of debt to fund recent acquisitions of the stakes of partners in the Alliance pipeline that ships natural gas to the US Midwest from Canada.
Fort Chicago, which boosted its interest in Alliance to 37.1 per cent by acquiring stakes held by Williams Cos. Inc. and El Paso Corp., said it would sell C$100 million of 7.5 per cent convertible subordinated debentures in a bought deal.
The debentures pay interest semiannually and are convertible into Fort Chicago limited partnership units at a price of CAN$9 each.
The company granted the underwriters, led by CIBC World Markets, TD Securities Inc. and Scotia Capital Inc., an option to buy up to an additional CAN$20 million of debentures under the same terms. The syndicate can also purchase up to another 15 per cent worth of the offering within 30 days.
Fort Chicago closed a CAN$93-million acquisition of five per cent of the 3,000 km (1,864 mile) Alliance pipeline from Williams in October.
The following month it bought 6.1 per cent of the pipeline and 4.9 per cent of its associated Aux Sable gas liquids plant and marketing operation for CAN$109 million.
By March it expects its interests to be 38.2 per cent of the pipeline and 30.9 per cent of Aux Sable.
The company said the offering was the first under a new shelf prospectus allowing for the sale of CAN$350 million of subordinated debt over a 25-year period.
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