Monday announced a restructuring plan that will cut debt by $15 billion by the end of 2005 and includes the merger of its
GulfTerra Energy Partners
Enterprise Products Partners
"The plan is the roadmap for the future of El Paso," said the company, adding it provides "significant cost savings, and establishes a new strategic direction for El Paso's exploration and production business."
The companies said the merger will create the second-largest publicly traded energy partnership, with a value of about $13 billion and operating under the name of Enterprise Products Partners. Under the plan, El Paso will sell a 50% interest, or about 14 million shares, of its majority stake in GulfTerra.
The deal will generate about $1 billion in cash for El Paso, which the company will use to pay down debt. El Paso had approximately $22 billion of debt as of Sept. 30, 2003.
The company expects the merger to be completed by the second half of 2004 and the majority of the larger plan to be in place by the end of 2005.
On Friday, El Paso shares fell 5 cents to $6.74, GulfTerra shares rose 22 cents to $40.19, and Enterprise Products finished 30 cents lower at $22.80.