Reuters: Mergers News: Chesapeake in talks to sell pipeline biz-source

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Chesapeake in talks to sell pipeline biz-source Jun 6th 2012, 18:23 NEW YORK, June 6 | Wed Jun 6, 2012 2:23pm EDT NEW YORK, June 6 (Reuters) - Chesapeake Energy is in late-stage talks to sell nearly all of its pipeline assets for over $4 billion to Global Infrastructure Partners (GIP), according to a person familiar with the matter, as the company scrambles to close a $9 billion to $10 billion funding shortfall. Infrastructure investment fund GIP is already a partner with Chesapeake in its pipeline company Chesapeake Midstream Partners LP, as well as that firm's general partner. Under the deal being discussed, GIP would buy out Chesapeake's stake in the midstream company and its general partner, as well as other pipeline assets, said the person, who spoke on the condition of anonymity. Chesapeake, the second-largest U.S. natural gas producer, is under pressure to sell assets and cut spending to reduce debt after tumbling natural gas prices have pinched profits. The company's corporate governance has also come under intense scrutiny since Reuters reported in April that Chief Executive Aubrey McClendon had taken out more than $1 billion in loans, using his personal stakes in thousands of company wells as collateral. McClendon has since agreed to relinquish his role as chairman, and the company has said it will replace four of its board members with directors chosen by its largest shareholders. Chesapeake and GIP declined to comment. Bloomberg originally reported news of the talks on Tuesday. According to that report, a deal could be announced within days. The company's annual meeting is scheduled for Friday, June 8. Chesapeake Midstream Partners has more than 3,700 miles of natural gas gathering pipelines, according to the company's website. The company also had about 1,950 miles of pipelines outside of the partnership at the end of last year. Link this Share this Digg this Email Reprints

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