By OGJ editors
HOUSTON, Nov. 19 -- Inergy LP, Kansas City, Mo., agreed to acquire Star Gas Propane LP, the propane operating partnership of Star Gas Partners LP, Stamford, Conn., for $475 million.
Upon completion, the acquisition will create the fifth-largest US retail propane operator. The transaction is expected to close in December, pending regulatory approvals.
Standard & Poor's Ratings Services kept Star Gas Partners on CreditWatch with negative implications, noting uncertainty about its ability to secure liquidity. As of June 30, Star Gas Partners had $510 million of debt.
"Although the proposed asset sale will provide proceeds for potentially significant debt reduction, S&P's remain concerned about the abrupt sale of Star Gas's more stable propane business," said S&P analyst Brian Janiak.
Star Gas Propane represents more than 50% of the total cash flow for its parent company, he added.