Chesapeake Energy (NYSE:CHK) says it will sell thousands of miles of pipelines and related assets to Global Infrastructure Partners (GIP) for $4 billion.
Billionaire investor Carl Icahn and Mason Hawkins of Southeastern Asset Management will help elect four new members to the company’s board as its embattled CEO Aubrey McClendon steps down after questionable management of the firm’s finances.
Chesapeake announced the sale of its general partner stake in Chesapeake Midstream Partners, which owns more than 3,700 miles of natural gas pipelines, to investment group GIP for $2 billion. GIP will own gain majority shares of Cheseapeak’s limited partner units under the agreement, Reuters noted.
Additionally, Chesapeake is negotiating the sale of its Chesapeake Midstream Development subsidiary, which controls 1,950 miles of natural gas pipelines, to GIP, raising another $2 billion.
Also on the block are 1.5 million acres in Permian basin lease holding, which the company hopes to sell later in the year. The company said that asset sales will raise between $11.5 billion and $14 billion this year.
Analysts cited by Reuters said it was a positive sign that Chesapeake assets were being sold for more than book value, indicating that it was not a “fire sale.”
Still, questions remain about the company’s ability to continue given its recent missteps.
Chesapeake shares rose more than 2% in late Friday afternoon trading.