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Chesapeake Energy (CHK) is in advanced discussions to sell its 45.2% limited partner interest in...

Chesapeake Energy (CHK) is in advanced discussions to sell its 45.2% limited partner interest in Chesapeake Midstream (CHKM) and other pipeline assets to Global Infrastructure for over $4B. The deal would be part of Chesapeake's strategy to sell assets as it faces a cash-flow shortfall that Alembic analyst James Sullivan believes could hit $22B by the end of 2013.
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Comments (2)
  • alang3
    , contributor
    Comments (2) | Send Message
    I'm not sure why the market is reacting so positively to this news. The same exact CEO that is creating headline risk (and actual legal liability) for CHK is still the CEO. Nothing has changed but 4 useless Board Members being replaced by 4 useless Board Members. Further, how are more AMTs (asset monetization transactions) going to "fix" CHK's liquidity problems? CHK is just "deferring" its liquidity problems, because a sale of an asset for its NPV means CHK will never realize the asset's FV (expected to greatly appreciate as an energy commodity). An M&A deal is out of the picture, so what do CHK shareholders have left but a ticking time-bomb of a liquidity crisis waiting to happen?
    6 Jun 2012, 10:24 AM Reply Like
  • Energysystems
    , contributor
    Comments (1413) | Send Message
    I don't know how board members are useless. Especially since Southeastern named a board member last year, and both SE/Icahn got a boardmember already they like(former Berkshire guy), and another board member is retiring and whoever replaces him will have to be approved by SE/Icahn. So from the looks of it, they'll have 6 of the 9 board members on their side. Liquidity problems will persist. But a takeover is still very possible, despite that. As a CHKM holder, I like this a lot.
    6 Jun 2012, 10:39 AM Reply Like
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