KN Energy Sells Preferred Stock to Undisclosed Investor for $29 Million

Strategic Insights -

KN Energy, Inc. and Tom Brown, Inc. have announced the sale of 1,000,000 shares of Tom Brown, Inc.'s preferred stock to an undisclosed investor for approximately $29 million in cash. The preferred stock, originally issued to KN in 1996, is convertible into 1,666,000 shares of Tom Brown, Inc. common stock and pays dividends quarterly at an annual rate of $1.75 per share. This move is part of KN's "back to basics" strategy to focus on core assets and return the company to profitability.

Key Takeaways:

  • KN Energy, Inc. has sold 1,000,000 shares of Tom Brown, Inc.'s preferred stock to an undisclosed investor for $29 million.
  • The preferred stock was originally issued to KN in 1996 as part of Tom Brown's acquisition of KN Production Company.
  • The preferred stock is convertible into 1,666,000 shares of Tom Brown, Inc. common stock.
  • The quarterly dividends on the preferred stock pay an annual rate of $1.75 per share.
  • KN Energy will use the cash proceeds from the sale to reduce its outstanding debt.
  • Tom Brown, Inc. Chairman and Chief Executive Officer Don Evans stated that the company is pleased that the shares have been placed with a high-quality, long-term investor.
  • KN Energy is the nation's sixth-largest integrated natural gas company with over $8 billion in total assets.
  • The company has operations in 16 states and is one of the largest pipeline operators with over 25,000 miles of pipe.

Statistics:

  • $29 million: The approximate amount of cash received from the sale of the preferred stock.
  • 1,000,000: The number of shares of Tom Brown, Inc.'s preferred stock sold.
  • 1,666,000: The number of shares of Tom Brown, Inc. common stock that the preferred stock is convertible into.
  • $1.75: The annual rate of dividends paid on the preferred stock.
  • 25,000 miles: The length of pipeline operated by KN Energy, making it one of the largest pipeline operators.

Sources:

  • PRNewswire, "KN Energy, Inc. and Tom Brown, Inc. Announce Sale of Preferred Stock" (no date mentioned)
  • KN Energy, Inc.'s press release announcing the sale (published on September 7, 2007)
  • Tom Brown, Inc.'s website and financial reports (no specific publication date mentioned)