Updated to reflect shareholder votes and added CEO comments
NEW YORK ( TheStreet) -- Chesapeake Energy (CHK - Get Report) sold its midstream assets to privately held Global Infrastructure Partners for $4 billion in its biggest deal of 2012 as a cash crunch looms.
The deal confirms previous speculation that amid an over $10 billion cash shortfall, Chesapeake Energy would look to sell the unit to raise much needed money. The move, which is Chesapeake's largest sale since questions emerged about CEO Aubrey McClendon's stewardship of the nation's second-largest gas driller, also comes amid a board shakeup that will give investors, including activist Carl Icahn, representation on its board.
In two separate deals, the Oklahoma City-based driller agreed to sell its stake in Chesapeake Midstream Partners and another subsidiary, Chesapeake Midstream Development, for a total of $4 billion. While the sales will help Chesapeake Energy to repair its finances, investors and analysts still expect billions more in asset sales."The proceeds of these transactions are an important part of our 2012 asset sales program that is on track to generate cash proceeds of $11.5-14.0 billion," said McClendon in a statement Friday. McClendon stressed that the move brings Chesapeake's divestiture total to $6.6 billion for the year, with its Permian asset sale and Mississippi Lime joint venture among other businesses that will be sold in the second half of 2012. "Importantly, the sale of