Item 1.02. Termination of a Material Definitive Agreement.
The information set forth in Item 2.01 of this Current Report on Form 8-K is
incorporated herein by reference into this Item 1.02.
Credit Agreements
On December 2, 2021, Enable Midstream Partners, LP (the "Partnership") completed
the transactions contemplated by that certain Agreement and Plan of Merger,
dated as of February 16, 2021, by and among Energy Transfer LP ("Energy
Transfer"), Elk Merger Sub LLC, a Delaware limited liability company and a
direct wholly owned subsidiary of Energy Transfer ("LP Merger Sub"), Elk GP
Merger Sub LLC, a Delaware limited liability company and a wholly owned
subsidiary of Energy Transfer ("GP Merger Sub"), the Partnership, Enable GP,
LLC, a Delaware limited liability company and the sole general partner of the
Partnership (the "General Partner"), solely for the purposes of
Section 2.1(a)(i) therein, LE GP, LLC, a Delaware limited liability company and
sole general partner of Energy Transfer, and, solely for the purposes of
Section 1.1(b)(i) therein, CenterPoint Energy, Inc., a Texas corporation ("CNP")
(the "Merger Agreement"), including (i) the merger of LP Merger Sub with and
into the Partnership (the "LP Merger"), with the Partnership surviving the LP
Merger as a wholly owned subsidiary of Energy Transfer (the "Surviving Entity"),
and (ii) the merger of GP Merger Sub, with and into the General Partner (the "GP
Merger" and, together with the LP Merger, the "Mergers"). In connection with the
closing of the Mergers, Energy Transfer, or one or more of its subsidiaries, on
behalf of the Partnership, repaid in full all outstanding indebtedness and the
Partnership terminated all remaining commitments and other obligations under
(i) that certain Term Loan Agreement, dated as of January 29, 2019, among the
Partnership as borrower, the lenders party thereto, and Bank of America, N.A.,
as administrative agent (as amended, restated, supplemented, or otherwise
modified from time to time, the "Term Loan Agreement"), (ii) that certain Second
Amended and Restated Revolving Credit Agreement, dated as of April 6, 2018 among
the Partnership as borrower, the lenders party thereto and Citibank N.A., as
administrative agent (together with the Term Loan Agreement, the "Credit
Agreements") and (iii) the Partnership's commercial paper program. The
Partnership did not incur any material early termination penalties or premiums
as a result of the repayment and termination of the Credit Agreements and
outstanding commercial paper obligations.
Secondment Arrangement
On December 2, 2021, in connection with the closing of the Mergers, the
Partnership, and the General Partner, as applicable, terminated agreements and
arrangements entered into with OGE Energy Corp. ("OGE") pursuant to which
employees of OGE or its affiliate provided services to the Partnership, the
General Partner or their respective subsidiaries as seconded employees. As of
such time of termination, Energy Transfer or its applicable affiliates extended
offers of employment to certain eligible employees seconded to the Partnership,
the General Partner or their respective subsidiaries, and offered such employees
eligibility to participate in the benefit plans of Energy Transfer or its
applicable subsidiaries. The Partnership, the General Partner or their
applicable subsidiary have agreed to remain responsible for any Termination
Costs and Severance Costs (as defined in the applicable secondment arrangement)
of each seconded employee who does not become an employee of the Partnership,
the General Partner or any of their subsidiaries prior to the effectiveness of
. . .
Item 2.01. Completion of Acquisition or Disposition of Assets.
The information set forth in Item 1.02 of this Current Report on Form 8-K is
incorporated herein by reference into this Item 2.01.
Pursuant to the Merger Agreement, and subject to the terms and conditions
therein, CNP contributed, assigned, transferred, conveyed and delivered to
Energy Transfer, and Energy Transfer acquired, assumed, accepted and received
from CNP, all of CNP's right, title and interest in each Series A Preferred Unit
representing a limited partner interest in the Partnership issued and
outstanding at such time in exchange for 0.0265 of a newly issued Series G
Preferred Unit issued by Energy Transfer, which Series G Preferred Units are
designated as 7.125% Series G Fixed-Rate Reset Cumulative Redeemable Perpetual
Preferred Units.
In connection with the completion of the LP Merger, Partnership common
unitholders received, for each Partnership Common Unit they owned as of
immediately prior to the Effective Time, 0.8595 of a common unit representing
limited partner interests in Energy Transfer (the "Energy Transfer Common
Units") (the "LP Merger Consideration"). In connection with the completion of
the GP Merger, holders of General Partner limited liability company interests
received cash in the amount of $10 million in the aggregate (together with the
LP Merger Consideration, the "Merger Consideration"). No fractional Energy
Transfer Common Units were issued. All fractional Energy Transfer Common Units
that a holder of Partnership Common Units would otherwise have been entitled to
receive were aggregated and then, if a fractional Energy Transfer Common Unit
resulted from the aggregation, rounded up to the nearest whole Energy Transfer
Common Unit.
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The foregoing summary of the Merger Agreement and Mergers does not purport to be
complete and is subject to, and is qualified in its entirety by, the full text
of the Merger Agreement, which is filed as Exhibit 2.1 to the Company's Current
Report on Form 8-K filed with the Securities and Exchange Commission (the "SEC")
on February 17, 2021 and incorporated herein by reference.
Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing.
In connection with the consummation of the Mergers, the New York Stock Exchange
(the "Exchange") was notified that each outstanding Partnership Common Unit was
converted into the right to receive the Merger Consideration described above,
subject to the terms and conditions of the Merger Agreement. The Partnership
requested that the Exchange file a notification of removal from listing on Form
25 with the SEC with respect to the delisting of the Partnership Common Units.
The Partnership Common Units ceased being traded following the close of trading
on December 2, 2021 and will no longer be listed on the Exchange. Furthermore,
the Partnership intends to file with the SEC a Form 15 requesting that the
reporting obligations of the Partnership under Sections 13(a) and 15(d) of the
Exchange Act be suspended.
Item 3.03. Material Modification to Rights of Security Holders.
The information set forth in Items 2.01, 3.01 and 5.01 of this Current Report on
Form 8-K is incorporated herein by reference into this Item 3.03.
LP Merger
In connection with the LP Merger, at the Effective Time (as defined in the
Merger Agreement):
• each Partnership Common Unit issued and outstanding immediately prior to
the Effective Time (other than the Partnership Common Units held directly
by Energy Transfer, LP Merger Sub or GP Merger Sub immediately prior to
the Effective Time) was converted into the right to receive 0.8595 (the
"Exchange Ratio") of a common unit representing a limited partner
interest in Energy Transfer;
• the Partnership Incentive Distribution Rights outstanding immediately
prior to the Effective Time were automatically cancelled and have ceased
to exist; and
• the non-economic general partner interest in the Partnership is unchanged
and remains outstanding as a non-economic general partner interest in the
General Partner surviving the GP Merger as a direct wholly owned
subsidiary of Energy Transfer and the General Partner is continuing as
the general partner of the Surviving Entity.
GP Merger
In connection with the GP Merger, at the Effective Time:
• all of the limited liability company interests of the General Partner
issued and outstanding as of immediately prior to the Effective Time were
converted into and will thereafter represent the right to receive
$10,000,000 in the aggregate, which were allocated among the members of
the General Partner in the amounts and to such accounts as designated in
the Merger Agreement; and
• Energy Transfer was admitted as the sole member of the General Partner.
Treatment of Partnership Equity Awards
On December 2, 2021, at the Effective Time, each award of phantom units that
corresponded to Partnership Common Units and vested solely based on the passage
of time, whether vested or unvested, that was outstanding immediately prior to
the Effective Time, was assumed by Energy Transfer and converted into an ET
restricted unit award (or in the case of seconded employees, an equivalent cash
settled award) on the same terms and conditions with respect to Energy Transfer
Common Units equal to the product obtained by multiplying (x) the number of
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Partnership Common Units subject to such Partnership phantom unit award
immediately prior to the Effective Time by (y) the Exchange Ratio, rounded up or
down to the nearest whole Energy Transfer Common Unit. Each converted restricted
unit award is subject to the same terms and conditions (including as to vesting,
distribution equivalent rights and issuance) as were applicable to the
Partnership phantom unit award immediately prior to the Effective Time.
On December 2, 2021, at the Effective Time, each award of performance units that
corresponded to Partnership Common Units that were outstanding and unvested as
of the Effective Time, was measured as to performance as of the Effective Time
(or a date reasonably proximate thereto) and was assumed by Energy Transfer and
converted into ET restricted unit awards (or in the case of seconded employees,
equivalent cash settled awards) based on the higher of actual performance or
target ("Earned Performance Unit") (except with respect to awards of performance
units granted in 2021 the number of Earned Performance Units was equal to the
target number of units granted, regardless of performance). Following the
conversion, the awards will continue to have distribution equivalent rights and
be eligible to vest solely based on continued service at the end of the
performance period that was originally applicable thereto; provided, however,
that the Earned Performance Units will continue to vest upon a "qualifying
termination" and, to the extent applicable, will incorporate the provisions
related to termination due to "retirement," as provided in the Partnership
phantom unit awards. The number of Energy Transfer Common Units subject to the
converted restricted unit awards was equal to the number of Earned Performance
. . .
Item 5.01. Changes in Control of Registrant.
The information set forth in Items 2.01, 3.03 and 5.02 of this Current Report on
Form 8-K is incorporated herein by reference into this Item 5.01.
As a result of the Mergers, a change in control of the Partnership occurred on
December 2, 2021, and the Partnership is now a direct wholly owned subsidiary of
Energy Transfer.
Energy Transfer's source of funds for the Merger Consideration included cash on
hand.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
The information set forth in Item 2.01 of this Current Report on Form 8-K is
incorporated herein by reference into this Item 5.02.
At the Effective Time of the Mergers, each of Rodney J. Sailor, Deanna J.
Farmer, John P. Laws, Mark C. Schroeder, Frank Antoine Jr. and Tom Levescy, and
all directors of the General Partner ceased to serve as officers and directors
of the General Partner.
Item 7.01 Regulation FD Disclosure.
On December 2, 2021, the Partnership and Energy Transfer issued a joint press
release announcing the completion of the Mergers. A copy of the press release is
attached hereto as Exhibit 99.1 and is incorporated herein by reference. In
accordance with General Instruction B.2 of Form 8-K, the information in this
Item 7.01, including Exhibit 99.1, shall not be deemed "filed" for the purposes
of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or otherwise subject to the liabilities of that section, nor shall such
information, including Exhibit 99.1, be deemed incorporated by reference in any
filing under the Securities Act of 1933, as amended, or the Exchange Act, except
as shall be expressly set forth by specific reference in such filing.
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ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
Exhibit
Number Description
2.1 Agreement and Plan of Merger, dated as of February 16, 2021 by and
among Energy Transfer LP, Elk Merger Sub LLC, Elk GP Merger Sub LLC,
Enable Midstream Partners, LP, Enable GP LLC, solely for purposes of
Section 2.1(a) therein, LE GP, LLC and, solely for purposes of
Section 1.1(b)(i), CenterPoint Energy, Inc. (incorporated herein by
reference to Exhibit 2.1 to the Current Report on Form 8-K filed by
Enable Midstream Partners, LP on February 17, 2021)*
99.1 Joint Press Release of Energy Transfer LP and Enable Midstream
Partners, LP dated December 2, 2021
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
* All schedules to the Merger Agreement have been omitted pursuant to Item
601(b)(2) of Regulation S-K. A copy of any omitted schedule and/or exhibit will
be furnished to the SEC upon request.
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