Southern Redeems Dep. Shares – Analyst Blog

Diversified natural gas utility Southern Union Company (SUG) will redeem its outstanding Depositary Shares with interest of 7.55% Noncumulative Preferred Stock, Series A without par value (Depositary Shares) at $25 per share plus accrued and unpaid dividends. The redemption is going to take place on July 30, 2010.

On redemption the company expects to pay roughly $115 million plus accrued and unpaid dividends, to the holders of outstanding Depositary Shares. The reported closing price per Depositary Share was $25.01 as on June 29, 2010.

Southern Union continues to exhibit balance sheet strength and ample liquidity, with $3.6 million in cash and cash equivalents in the recently reported quarter. As of the quarter-end, the company had about $420 million in committed revolving credit facilities with $80 million outstanding.

Southern Union ended the quarter with a total debt of $3.47 billion compared with $3.56 billion in the first quarter of 2009. In the quarter, the company invested approximately $107 million in operations, with $36 million earmarked for growth capital and $71 million for maintenance capital.

Going forward, the company expects to earn net earnings of $1.92 to $2.12 per share (GAAP basis) and adjusted net earnings of $1.75 to $1.95 per share for 2010.

Houston-based Southern Union Company is engaged primarily in the transportation, storage, gathering, processing and distribution of natural gas. The company owns and operates one of the nation’s largest natural gas pipeline systems with more than 20,000 miles of gathering and transportation pipelines and one of North America’s largest liquefied natural gas import terminals.