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CenterPoint Energy completes internal spin of Enable interests to new subsidiary

CenterPoint Energy Inc. completed an internal spin of its midstream interests in Enable Midstream Partners and its general partner Enable GP, LLC to a newly created subsidiary CenterPoint Energy Midstream Inc., a move that will turn CenterPoint Energy Resources Corp. toward a pure natural gas local distribution company.

As of June 30, CenterPoint Energy Resources owned approximately 54% of the common units representing limited partner interests in Enable, which owns, operates and develops natural gas and crude oil infrastructure assets, according to a recent Form 10-Q filing. Prior to the completion of this internal spin, CenterPoint Energy Resources and OGE Energy Corp. jointly controlled Enable and each owned 50% of the management rights in Enable GP.

The affected interests, however, exclude CenterPoint Energy's investment in $363 million of Enable Midstream's 10% perpetual preferred securities, according to a Sept. 4 news release.

CenterPoint Energy Resources owns and operates natural gas distribution systems in six states and obtains and offers competitive variable and fixed-price physical natural gas supplies and services primarily to commercial and industrial customers and electric and natural gas utilities in 33 states through its wholly owned subsidiary, CenterPoint Energy Services Inc.

The internal reorganization is intended to provide better earnings visibility, while simplifying structure, the company said. CenterPoint Energy Resources' pro-forma capital structure would reflect the weighted average capital structure used in in rates for CenterPoint utilities of approximately 52% equity and 48% debt.

CenterPoint Energy plans to reduce legacy midstream indebtedness at Centerpoint Energy Resources by capital contributions in the near term and at the holding company by other sources by year-end. The newly established subsidiary, CenterPoint Energy Midstream, is expected to incur debt in connection with the spin.

CenterPoint Energy is currently in the process of merging with Vectren Corp. The deal, which is expected to close in the first quarter of 2019, is expected to result to nearly $29 billion in combined assets and more than 7 million customers.