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Morgan Stanley Infrastructure Partners acquires full ownership of Southern Star

Morgan Stanley Infrastructure Partners (MSIP) has increased its ownership stake to 100 per cent of the common equity of Southern Star Central Corp, parent company of Southern Star Central Gas Pipeline.

MSIP, a USD4bn global infrastructure fund, originally acquired a 40 per cent economic stake with 50 per cent governance rights in Southern Star in March 2010.

Southern Star is the primary gas transmission and natural gas storage facility provider for several major US Midwest cities and power generation providers. Southern Star serves metropolitan areas in Missouri (Kansas City, St. Louis, Springfield, St. Joseph and Joplin), Kansas (Wichita, Kansas City, Topeka and Lawrence) and Oklahoma (Oklahoma City). Southern Star receives gas supplies from major producing regions, including the Hugoton, Anadarko and Rocky Mountain basins.

“Opportunities to invest in the US natural gas pipeline sector are scarce, and we are very pleased to acquire full ownership of another regulated core infrastructure asset,” says John Veech, head of Americas investing for Morgan Stanley Infrastructure. “We have worked closely with Southern Star’s seasoned management team to initiate growth projects and implement a strategic capital expenditures programme. We look forward to further building the business and continuing to provide excellent service to customers.”

Jerry Morris, president and chief executive officer of southern star, says: “Morgan Stanley Infrastructure Partners has been a very strong partner, and with their support and guidance we have strategically grown our capabilities and implemented critical operational improvements across the system. Our customers should expect further enhancements to service and flexibility.”

Completion of the transaction is subject to certain standard conditions, including expiration or termination of the Hart-Scott-Rodino antitrust review period and reaffirmation of credit ratings of certain outstanding bonds. The seller received a limited amount of preferred equity. Other terms of the transaction were not disclosed.

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