DALLAS, Jan 07, 2010 (BUSINESS WIRE) -- The Crosstex Energy companies, Crosstex Energy, L.P. (NASDAQ: XTEX) (the
Partnership) and Crosstex Energy, Inc. (NASDAQ: XTXI) (the Corporation),
announced today the agreement to issue $125 million of Series A
Convertible Preferred Units to the Blackstone / GSO Capital Solutions
funds. The funds are managed by GSO Capital Partners LP, an affiliate of
The Blackstone Group L.P. (NYSE: BX), one of the world's largest and
most respected investment and advisory firms.
The preferred units are priced at $8.50 per unit and are convertible at
any time into common units on a one-for-one basis, subject to certain
adjustments and to Crosstex's right to force conversion of the preferred
units if certain conditions are met. The purchase price represents a 20
percent premium to the trailing 30 day volume weighted average price of
the common units. The preferred units will pay a quarterly distribution
that will be the greater of $0.2125 per unit or the amount of the
quarterly distribution per unit paid to common unitholders, subject to
certain adjustments. Such quarterly distribution may be paid in cash, in
additional preferred units issued in kind or any combination thereof.
Crosstex intends to use the proceeds from the issuance for further debt
reduction. The investors in the preferred units will receive a seat on
the Crosstex Energy, L.P. Board of Directors, expanding the Board from
seven to eight members. The transaction is expected to close prior to
the end of January.
"We are extremely pleased that Blackstone and GSO have demonstrated
their confidence in our business and future by making this substantial
investment, and we welcome them as a significant investor," said Barry
E. Davis, Crosstex President and Chief Executive Officer. "This
additional capital, combined with our asset sales and other cash flow
initiatives, is the latest step in our plan to improve our balance sheet
and accelerates our ability to refinance our existing debt and
ultimately restore our distributions and dividends."
"Crosstex is a premier midstream energy services provider with
strategically-located assets in some of the most attractive regions in
the United States," said Dwight Scott, Senior Managing Director at GSO.
"We are excited about Crosstex's prospects as it executes the final
stage of its financing plan and positions itself to grow. We look
forward to the opportunity for future investments in and with the
Crosstex companies as they execute their strategy to create value for
unitholders and shareholders."
Neither the Series A Convertible Preferred Units nor the Common Units
into which they are convertible have been registered under the
Securities Act of 1933, as amended (the "Securities Act"), or any state
securities laws, and they may not be offered or sold in the United
States absent a registration statement or exemption from registration.
This notice is issued pursuant to Rule 135c under the Securities Act of
1933 and shall not constitute an offer to sell or the solicitation of an
offer to buy, nor shall there be any sale of these securities in any
state in which such offer, solicitation or sale would be unlawful prior
to the registration or qualification under the securities laws of any
About the Crosstex Energy Companies
Crosstex Energy, L.P., a midstream natural gas company headquartered in
Dallas, operates approximately 3,300 miles of pipeline, 10 processing
plants and three fractionators. The Partnership currently provides
services for 3.2 billion cubic feet of natural gas per day, or
approximately six percent of marketed U.S. daily production.
Crosstex Energy, Inc. owns a two percent general partner interest, a 33
percent limited partner interest and incentive distribution rights in
Crosstex Energy, L.P.
Additional information about the Crosstex companies can be found at www.crosstexenergy.com.
About The Blackstone Group and GSO
Blackstone is one of the world's leading investment and advisory firms.
Blackstone seeks to create positive economic impact and long-term value
for its investors, the companies it invests in, the companies it advises
and the broader global economy. The firm does this through the
commitment of its extraordinary people and flexible capital. GSO Capital
Partners LP, with approximately $24 billion of assets under management,
is one of the largest credit-oriented alternative asset managers in the
world and a major participant in the leveraged finance marketplace. GSO
seeks to generate superior risk-adjusted returns in its credit business
by investing in a broad array of public and private instruments across
multiple investment strategies. Key areas of focus include mezzanine,
credit hedge funds, leveraged loans and other special situation
strategies. Blackstone's other alternative asset management businesses
include the management of private equity funds, real estate funds, funds
of hedge funds, and closed-end mutual funds. The Blackstone Group also
provides various financial advisory services, including mergers and
acquisitions advisory, restructuring and reorganization advisory and
fund placement services. Further information is available at www.blackstone.com.
This press release contains forward-looking statements within the
meaning of the federal securities laws. These statements are based on
certain assumptions made by the Partnership and the Corporation based
upon management's experience and perception of historical trends,
current conditions, expected future developments and other factors the
Partnership and the Corporation believe are appropriate in the
circumstances.These statements include, but are not limited to,
statements with respect to the expected closing of the Blackstone/GSO
investment and the effect of such investment on the Partnership's future
liquidity, leverage, business and results of operations.Such
statements are subject to a number of assumptions, risks and
uncertainties, many of which are beyond the control of the Partnership
and the Corporation, which may cause the Partnership's and the
Corporation's actual results to differ materially from those implied or
expressed by the forward-looking statements.These risks include,
but are not limited to, risks discussed in the Partnership's and the
Corporation's filings with the Securities and Exchange Commission.The
Partnership and the Corporation have no obligation to publicly update or
revise any forward-looking statement, whether as a result of new
information, future events or otherwise.
SOURCE: Crosstex Energy
Jill McMillan, Director, Public & Industry Affairs, 214-721-9271