On
June
29, 2007, MDU Resources Group, Inc. (the “Company”) entered into a term loan
agreement (the “Loan Agreement”) with Wells Fargo Bank, National Association, as
administrative agent, and the lenders thereunder, providing for a commitment
amount of $310 million to be used in connection with the financing of the
Cascade Natural Gas Corporation (“Cascade”) merger discussed in Item 2.01
below. The Company borrowed $310 million under the Loan Agreement on
July 2, 2007, in connection with the closing of the Cascade
merger. The loan matures on June 27, 2008, and is subject to
mandatory prepayment provisions upon (i) the sale of the capital stock or
assets
of Centennial Power, Inc. or Colorado Energy Management, LLC, (ii) the
incurrence of debt obligations by the Company or MDU Energy Capital, LLC,
a
subsidiary of the Company that indirectly owns Cascade (“Energy Capital”) or
(iii) the issuance of capital stock by the Company or Energy
Capital.
The
Loan
Agreement contains customary covenants and default provisions, including
covenants of the Company not to permit, as of the end of any fiscal quarter,
(i)
the ratio of funded debt to total capitalization (determined on a consolidated
basis) to be greater than 65 percent or (ii) the ratio of funded debt to
capitalization (determined with respect to the Company only, excluding its
subsidiaries) to be greater than 65 percent. The Loan Agreement also
includes a covenant requiring the ratio of the Company’s earnings before
interest, taxes, depreciation and amortization to interest expense (determined
with respect to the Company alone, excluding its subsidiaries), for the
twelve-month period ended each fiscal quarter, to be greater than 2.5 to
1.
Item
2.01 Completion of Acquisition or Disposition of
Assets.
On
July
2, 2007, the Company issued a press release announcing that its merger
with
Cascade has been finalized. As a result of the merger, a subsidiary
of the Company now owns all of the outstanding equity securities of
Cascade. The merger is for cash consideration of $26.50 per share of
Cascade common stock. The total value of the transaction, including
outstanding Cascade indebtedness, is approximately $475
million. A copy of the press release is incorporated by
reference herein and is attached as Exhibit 99.
The
foregoing description of the merger does not purport to be complete and
is
qualified in its entirety by reference to the Agreement and Plan of Merger
by
and among the Company, Firemoon Acquisition, Inc. and Cascade, dated as
of July
8, 2006, filed by Cascade as Exhibit 2.1 to its Form 8-K dated July 10,
2006, in
File No. 1-7196.
Item
2.03 Creation of a Direct Financial Obligation or an Obligation under
an Off-Balance Sheet Arrangement of a Registrant.
The
disclosure set forth above under Item 1.01 is hereby incorporated by reference
in this Item 2.03.
Item
9.01. Financial Statements and Exhibits.
(d) Exhibits
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99
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Press
release issued July 2, 2007.
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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MDU
RESOURCES GROUP, INC. |
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Dated: July
3, 2007
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By |
/s/
Vernon A. Raile
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Vernon
A. Raile
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Executive
Vice President, Treasurer and Chief
Financial Officer
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EXHIBIT
INDEX
Exhibit
Number
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Description
of Exhibit
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99
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