* To raise up to $250 mln
* Plans to list common units on NYSE under the symbol "QPP"
* J.P. Morgan, Credit Suisse are underwriting IPO
* Quicksilver Resources shares fall 5 pct in early trade
By Swetha Gopinath and Ashutosh Pandey
Feb 10 Debt-laden Quicksilver Resources
Inc plans to take its master limited partnership (MLP)
public in a $250 million offering, to cash in on rising investor
appetite for the high-yield paying corporate structure.
MLPs, which pay no corporate tax, have been favored by
investors as they distribute most of their profits.
The natural-gas focused company, whose cash flows have been
drained by plunging prices for the fuel, said it will generate
about $400 million from the sale of units in Quicksilver
Production Partners and debt assumed by the MLP.
"Generally we expect a very positive reception to this deal.
We saw the enormous extent of liquidity available to MLPs in all
markets," said Josef Schuster, founder of IPOX Schuster, a fund
that specializes in investing in newly public companies.
Jefferies & Co analyst Subash Chandra said Quicksilver was
betting on the MLP market holding up.
Quicksilver shares, which have lost two-thirds of their
value in the past year, were down nearly 5 percent at $5.12 in
midday trade on Friday on the New York Stock Exchange.
The shares have gained 29 percent in value since touching a
year low on Feb. 1.
The partnership holds proved reserves of 430.4 billion cubic
feet of natural gas equivalent in the Barnett Shale.
Quicksilver Production Partners, which was formed in
November, did not say how many units it planned to sell or their
expected price in a filing with the U.S. Securities and Exchange
"Quicksilver has advised us that it intends to use the cash
consideration received for the partnership properties to retire
a portion of its existing debt," the filing read.
Quicksilver Resources had debt of about $2.1 billion and
cash and equivalents of $6.6 million as of September end,
Thomson Reuters Data showed.
"We anticipate this transaction to be essentially neutral to
cash flow for Quicksilver," Chief Executive Glenn Darden said on
a conference call with analysts.
Natural gas prices have hit decade-lows, as output
has soared, straining balance sheets of producers who typically
outspend cash flow to fund expensive drilling projects.
"Investors may look over initial concerns regarding the
parent company," Schuster said.
Quicksilver Production Partners said J.P. Morgan and Credit
Suisse would underwrite the IPO. It has applied to have its
common units listed on the New York Stock Exchange under the
The amount of money a company says it plans to raise in its
first IPO filings is used to calculate registration fees. The
final size of the IPO could be different.