January 4, 2017 / 12:16 PM / 7 months ago

BRIEF-DCP Midstream Partners to buy assets of Philips-Spectra JV

2 Min Read

Jan 4 (Reuters) - DCP Midstream Partners LP

* DCP Midstream LLC has contributed units owning its assets to co plus $424 million cash

* DCP Midstream, LLC and DCP Midstream Partners, LP combine to form the largest NGL producer and gas processor in the U.S. With an enterprise value of $11 billion, and announces multiple new growth projects

* Terms of transaction were unanimously approved by board of directors of DCP Midstream and DCP Midstream Partners

* cash proceeds of $424 million contributed to co will be used to repay its revolver

* owners have retained their 50/50 joint ownership of DCP Midstream, LLC

* co will construct a new 200 mmcf/d cryogenic natural gas processing plant (mewbourn 3) in DJ Basin

* "combination is immediately accretive"

* Transaction is projected to be distributable cash flow accretive to co's unitholders at current strip prices

* on January 23, 2017, combined company will be renamed DCP Midstream, LP

* transaction increases Phillips 66 and Spectra Energy's ownership in co to 38 percent

* expanding Sand Hills NGL pipeline to its full 365 thousand barrels per day (bpd) of capacity by end of 2017

* to support minimum 1.0 times distribution coverage ratio, JV owners agreed to provide IDR givebacks up to $100 million annually through 2019

* Co assuming $3.15 billion of DCP Midstream LLC debt under deal

* DCP Midstream LLC will receive about 31.1 million DPM units ($1.125 billion) and DCP Midstream Partners will assume $3.15 billion in debt

* Owners have retained their 50/50 joint ownership of DCP Midstream, LLC, which owns incentive distribution rights

* DCP Midstream LLC has contributed subsidiaries owning its assets to DCP Midstream Partners LP, plus $424 million of cash Source text for Eikon: Further company coverage:

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