As a result of its investment, Genesis Park will own a 28% interest in El Paso Networks and its broadband system. The system currently provides telecommunications services to wholesale customers in major metropolitan areas in Texas, including Dallas/Ft. Worth, Austin, Houston, and San Antonio. In addition, Paul Hobby, founding partner of Genesis Park, will become CEO of El Paso Networks.
El Paso and Genesis Park expect that the proceeds from the investment – together with funds from operations – will fund all ongoing operating expenses and capital expenditures for El Paso Networks and relieve El Paso Corporation of future funding requirements for the business.
As part of the transaction, however, El Paso and Genesis Park have each agreed to a potential one-time additional investment of $5 million to fund growth opportunities. These commitments will also provide additional certainty for El Paso Networks and its customers as the company transitions to a self-sustaining and more independent enterprise.
This transaction is an excellent development for El Paso, Genesis Park, and the customers of El Paso Networks, said Lisa Stewart, president of El Paso Corporation’s production and non-regulated operations.
Genesis Park’s investment will provide for the financial independence of El Paso Networks while fulfilling our commitment to reduce our ongoing involvement in the telecommunication arena as part of our long-range plan. The transaction also validates the inherent value and potential of this business. The company’s customers will have the assurance of knowing this business is capitalized for its current business requirements as well as poised for continued growth as a stand-alone entity.
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