Business Context and Reporting Period
This Form 8-K Current Report was filed by Energy Transfer Equity, L.P. on January 12, 2017, covering events that occurred on January 6, 2017. The filing details the entry into material definitive agreements regarding a private placement of common units and a subsequent purchase of units in an affiliated entity.
Key Financial Metrics and Transaction Details
- Offering Size: 32,222,225 common units sold to institutional investors.
- Purchase Price: $18.00 per common unit.
- Gross Proceeds: Approximately $580 million.
- Use of Proceeds: Funds are designated to purchase 15,785,056 newly issued common units in Energy Transfer Partners, L.P. (ETP).
- Closing Date: January 12, 2017.
Material Changes and Agreements
The Partnership entered into two primary agreements on January 6, 2017, which closed on January 12, 2017:
- PIPE Purchase Agreement: A private placement transaction with institutional purchasers exempt from registration under Section 4(a)(2) of the Securities Act of 1933. This agreement includes customary representations, warranties, covenants, and indemnification provisions.
- Registration Rights Agreement: The Partnership agreed to file and maintain a registration statement for the resale of the common units and granted piggyback registration rights to the purchasers.
- ETP Purchase Agreement: An agreement to use the offering proceeds to acquire common units in Energy Transfer Partners, L.P. This transaction was approved by the boards of directors and conflicts committees of both entities.
Guidance, Outlook, and Risks
The filing does not provide specific financial guidance, outlook, or management commentary regarding future performance. The primary risk disclosure relates to the reliance on the Section 4(a)(2) exemption for the private placement, though the Partnership notes that other exemptions may exist. The transaction is subject to the terms and conditions of the Purchase Agreements and Registration Rights Agreement filed as exhibits.
Investor Verification Checklist
- Verify the full text of the Common Unit Purchase Agreement (Exhibit 10.1) for specific covenants and limitations.
- Review the Registration Rights Agreement (Exhibit 10.2) to understand resale restrictions and piggyback rights.
- Confirm the details of the ETP Purchase Agreement (Exhibit 10.3) regarding the acquisition of Energy Transfer Partners, L.P. units.
- Monitor subsequent filings for the registration statement required for the resale of the common units.