DEARBORN, Mich., Oct. 15, 2002 — CMS Energy Corp. said it has updated its financial plan to eliminate the need to access the capital markets for the remainder of 2002.
The company has received bank commitments to use stored natural gas as part of a collateral package to raise $200 million to $250 million in financing for its main subsidiary, Consumers Energy. This financing, which is expected to close in October, will eliminate the need for Consumers Energy to go to the capital markets for the remainder of 2002. Consumers Energy currently has about 95 billion cubic feet of working natural gas in its underground storage fields.
The company also said that further cost-cutting steps and sales of non- strategic assets are expected to eliminate the need for CMS Energy to access the capital markets this year. Asset sale proceeds are expected to repay the balance of a CMS Energy $296 million credit facility due March 2003.
CMS Energy is seeking indications of interest to purchase its interstate natural gas pipeline business, the CMS Panhandle Companies, and its natural gas gathering and processing business, CMS Field Services, as part of its overall restructuring effort.
CMS Panhandle’s major assets include 10,300 miles of gas pipeline, extending from the Gulf of Mexico to Canada, and the largest operating liquefied natural gas (LNG) terminal in the United States. CMS Field Services, the midstream unit of CMS Energy, gathers, treats, processes, and delivers natural gas and natural gas liquids to market hubs throughout the supply regions of Louisiana, West Texas, Central Texas, the Midcontinent, and Rocky Mountains.
CMS Field Services owns approximately 3,700 miles of gathering pipeline and through its subsidiary, Bighorn Gas Gathering, LLC, is one of the largest gatherers of coal bed methane in northern Wyoming’s Powder River Basin.
CMS Energy also announced that a special committee of its Board of Directors is nearing completion of its investigation into the company’s round- trip trading. The special committee will present the results of its investigation to the board later this month.
“Our mission is to provide a comprehensive report to the Board of Directors. We are close to reaching that goal,” said Kenneth L. Way, the special committee chairman. “The only conclusion that should be reached about the new schedule is simply that it has taken the special committee a little longer than expected to complete its work.”
Meanwhile, the company’s independent auditor, Ernst & Young LLP, continues to make progress on its work to re-certify the CMS Energy financial statements for 2000 and 2001. Ernst & Young had indicated previously that it would need the special committee to complete its work before it could issue those certifications.
CMS Energy Corporation is an integrated energy company, which has as its primary business operations an electric and natural gas utility, natural gas pipeline systems, independent power generation, and energy marketing, services, and trading.
Source: CMS Energy Corporation