IPO for Dynegy unit
Operators of natural gas business to go public and sell 8.75M shares via Lehman.
February 25, 2002: 12:00 p.m. ET
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NEW YORK (CNN/Money) - Dynegy Inc. revealed plans Monday to tap the public markets for energy-related issues and will launch an initial public offering of its natural gas liquids business.
Dynegy Energy Partners LP transports, distributes, and markets liquid energy to consumers throughout North America. The company plans to sell 8.75 million common units at an undetermined price via lead underwriter Lehman Brothers.
The company will set its price range in later filings with the Securities and Exchange Commission. However, it said it expects to generate $165.2 million in net proceeds, assuming a $20 price range.
Dynegy Energy will pay a cash dividend of about 44 cents a quarter, or $1.75 a year, to unit holders. Common units of Dynegy Energy will list on the New York Stock Exchange symbol "DEP."
Houston-based Dynegy (DYN: down $0.35 to $24.45, Research, Estimates), an energy trader, recently formed a limited partnership to own and operate its liquids business and called it Dynegy Energy Partners. Parent Dynegy owns 55.2 percent limited partnership interest and 2 percent general partner interest in the subsidiary.
Dynegy Energy Partners, also of Houston, warned that if credit support supplied by an affiliate of parent Dynegy is terminated or diminished, its cost of doing business may increase significantly, the company said in a filing with the SEC.
Parent Dynegy Inc. called off a $9 billion merger pact with Enron Corp. last year after a cut in Enron's credit rating forced about $3.9 billion in debts to come due immediately. Enron then filed for bankruptcy protection and the two energy traders are mired in lawsuits against each other. 
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