Gas Natural Inc. Announces Proposed Corporate Structural Revisions and Pending $92 Million Debt Refinancing

- New organizational structure, subject to regulatory approval, will align regulated utility operations under one entity to streamline regulatory processes and costs

- New financing facilities, also presented for regulatory review and approval, will expand total lending capacity and consolidate debt in new holding company

Feb 18, 2016, 06:55 ET from Gas Natural Inc.

CLEVELAND, Feb. 18, 2016 /PRNewswire/ -- Gas Natural Inc. (NYSE MKT: EGAS) (the "Company"), a holding company operating local natural gas utilities serving approximately 67,000 customers in four states, announced that it filed with its regulators a proposed new corporate organizational structure and corresponding financing arrangements consistent with the new corporate structure. 

Corporate Structural Revisions
In order to streamline its structure to facilitate greater focus on the four regulatory jurisdictions in which it operates, as well as to simplify its financing arrangements, Gas Natural proposes to create a wholly-owned subsidiary under which each of its nine regulated entities will be held.  With the new structure, which is subject to regulatory approval, the regulated entities will be segregated from non-regulated operations. 

Gregory J. Osborne, President and Chief Executive Officer, commented, "Our corporate structural changes and the new financing arrangement further reflect the progress we are making to establish a solid foundation upon which we can grow Gas Natural and build shareholder value.  The new organizational structure will support our strategy by properly aligning our regulated operations, creating streamlined responsibilities for each regulatory jurisdiction, and enabling a much improved financing structure for the whole organization.  We worked diligently to reflect and address specific constituencies and their respective interests in the development of this organizational structure.  I believe it enables us to build upon the progress we have made in operational reform and regulatory relations." 

Pending Financing Agreements
The Company also announced that it has reached agreement with its lenders to refinance and consolidate its debt within the proposed subsidiary holding company.  The long-term debt agreements include proposed issuance of up to $50 million of senior notes, with maturities and interest rates to be determined upon closing, subject to prevailing market conditions at that time.  The Company will additionally establish a $42 million five-year revolving credit facility. Closing on the debt agreements is subject to requested regulatory approvals and other closing conditions.  Upon closing, proceeds from the new debt facilities will replace the Company's five existing loan facilities and provide additional cash for operational purposes.

James E. Sprague, Gas Natural's Chief Financial Officer, commented, "We expect that this operating structure and refinancing will provide much greater financial flexibility for the Company.  Subject to regulatory approval and other closing conditions, we anticipate closing on our new debt agreements in the second half of 2016."

About Gas Natural Inc.
Gas Natural Inc., a holding company, distributes and sells natural gas to end-use residential, commercial, and industrial customers.  It distributes approximately 26 billion cubic feet of natural gas to approximately 67,000 customers through regulated utilities operating in Montana, Ohio, Maine and North Carolina.  The Company's other operations include interstate pipeline, natural gas production, and natural gas marketing.  The Company's Montana public utility was originally incorporated in 1909.  Its strategy for growth is to expand throughput in its markets, while looking for acquisitions that are either adjacent to its existing utilities or in under saturated markets.  Gas Natural Inc. regularly posts information on its website at

Safe Harbor Regarding Forward-Looking Statements
The Company is including the following cautionary statement in this release to make applicable and to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of, Gas Natural Inc. Forward-looking statements are all statements other than statements of historical fact, including, without limitation, those that are identified by the use of the words "anticipates," "estimates," "expects," "intends," "plans," "predicts," "believes" and similar expressions. Such statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those expressed. Factors that may affect forward-looking statements and the Company's business generally include but are not limited to the Company's ability to consummate the corporate reorganization and debt refinancing on terms that are acceptable to the Company, or at all; the Company's ability to successfully integrate the operations of the companies it has acquired and consummate additional acquisitions; the Company's continued ability to make dividend payments; the Company's ability to implement its business plan; fluctuating energy commodity prices; the possibility that regulators may not permit the Company to pass through all of its increased costs to its customers; changes in the utility regulatory environment; wholesale and retail competition; the Company's ability to satisfy its debt obligations, including compliance with financial covenants; weather conditions; litigation risks; and various other matters, many of which are beyond the Company's control; the risk factors and cautionary statements made in the Company's public filings with the Securities and Exchange Commission; and other factors that the Company is currently unable to identify or quantify, but may exist in the future. Gas Natural Inc. expressly undertakes no obligation to update or revise any forward-looking statement contained herein to reflect any change in Gas Natural Inc.'s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

For more information, contact:

Gas Natural Inc.

Investor Relations: 

James E. Sprague

Deborah K. Pawlowski / Karen L. Howard

Chief Financial Officer

Kei Advisors LLC

Phone: (216) 202-1564

Phone:  (716) 843-3908 / (716) 843-3942


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SOURCE Gas Natural Inc.