| Item 7.01. | REGULATION FD DISCLOSURE. |
On October 18, 2018, Oncor Electric Delivery Company LLC (“Oncor”) and Sempra Energy (“Sempra”), the indirect owner of 80.25 percent of Oncor’s outstanding membership interests, issued a joint press release announcing transactions pursuant to which Oncor will acquire all of the outstanding equity of InfraREIT, Inc. (“InfraREIT”) and all of the limited partnership units of its subsidiary, InfraREIT Partners LP (the “InfraREIT Acquisition”).
Sempra and Oncor senior management plan to hold a conference call on Thursday, October 18, 2018 at 12:00 PM Eastern Time to discuss the InfraREIT Acquisition and will refer to a slide presentation referred to below and being furnished herewith. Investors, media, analysts and the public may listen to a live webcast of the conference call on Sempra’s website, www.sempra.com, by clicking on the appropriate audio link. Those who wish to participate in the call live may do so in the US and Canada by dialing (888) 204-4368 and entering passcode 3162523 or internationally by dialing (323) 994-2082 and entering passcode 3162523. For those unable to obtain access to the live webcast, the teleconference will be available on replay a few hours after its conclusion on Sempra’s website or by dialing (888) 203-1112 and entering passcode 3162523.
The press release is furnished herewith as Exhibit 99.1 and the slide presentation distributed in connection with the conference call is furnished herewith as Exhibit 99.2.
In accordance with General Instruction B.2 of Form 8-K, the information presented herein under Item 7.01 and set forth in the attached Exhibits 99.1 and 99.2 shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, and is not to be incorporated by reference into any filing of Oncor under the Securities Act of 1933 or the Securities Exchange Act of 1934, as amended.
On October 18, 2018, Oncor and Sempra announced the signing of definitive agreements relating to the InfraREIT Acquisition. The InfraREIT Acquisition will occur through the merger of InfraREIT with and into a newly formed wholly owned subsidiary of Oncor, followed by the merger of another newly formed wholly owned subsidiary of Oncor with and into InfraREIT Partners, LP (“InfraREIT Partners”), which is a subsidiary of InfraREIT. InfraREIT’s stockholders and the limited partners of InfraREIT Partners will receive $21.00 in cash per share of common stock or limited partnership unit, as applicable. Total purchase price based on the number of shares and partnership units of InfraREIT and InfraREIT Partners currently outstanding is approximately $1.275 billion, plus Oncor would bear certain transaction costs incurred by InfraREIT (including a management agreement termination fee of approximately $40.5 million that InfraREIT has agreed to pay Hunt Consolidated, Inc. at closing). The acquisition also includes InfraREIT’s outstanding debt, which totaled an aggregate of approximately $945 million at June 30, 2018.
As a condition to the InfraREIT Acquisition, InfraREIT’s subsidiary, Sharyland Distribution & Transmission Services, L.L.C. (“SDTS”), and SDTS’s tenant, Sharyland Utilities, L.P. (“Sharyland”), will complete an asset exchange immediately prior to the closing of the InfraREIT Acquisition, pursuant to which SDTS will exchange its south Texas assets for certain assets owned by Sharyland (the “Asset Exchange” and, together with the InfraREIT Acquisition, the “Transactions”). As result, upon closing of the Transactions, Oncor will own all of SDTS’s and Sharyland’s assets and projects in north, central and west Texas and Sharyland will own its and SDTS’s assets in south Texas.
The Transactions also contemplate that Sharyland and Sempra will enter into an agreement whereby Sempra will acquire an indirect 50 percent limited partnership interest in Sharyland. The closing of Sempra’s purchase is a requirement to closing of the Asset Exchange. The Transactions also provide for Oncor to enter into an agreement with Sharyland at closing of the Transactions pursuant to which Oncor will operate and maintain Sharyland’s assets following closing of the Transactions. The Transactions require approvals by the Public Utility Commission of Texas and Federal Energy Regulatory Commission, the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and the satisfaction of other regulatory requirements, certain lender consents and other customary closing conditions. Additionally, the purchase of InfraREIT requires approval by its shareholders.
