DOW JONES NEWSWIRES
Atlas Pipeline Partners LP (APL) reached agreements to sell about 2.7 million common units at a 13% discount to the company's closing price Friday in a private placement to institutional investors, aiming to raise proceeds of about $17 million.
The company will use the proceeds to help repay part of its senior secured term loan and to terminate some legacy natural-gas derivative positions.
Atlas' units were down 10.1% at $6.56 in recent trading. The units, which closed at $7.30 on Friday, have lost nearly 80% of their value in the past year, as natural gas prices plunged.
The private placement, priced at $6.35 a unit, will dilute the partnership's common units by about 5.7%. Investors also will have the right to purchase an additional 2.7 million units at the same price.
Falling fuel demand and tumbling commodity prices have been squeezing small pipeline operators like Atlas, leading it to take steps to raise capital and hurting its credit ratings.
Atlas in April formed a natural-gas gathering and processing joint venture with Williams Cos. (WMB) to help Atlas pay down debt, while in May it closed the $300 million sale of its Ozark Gas transmission and gathering operations.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481; tess.stynes@dowjones.com