NUI Utilities has entered into a letter of intent with a third-party lender for a $50 million unsecured credit to fund its short-term needs as parent NUI Corp.'s board of directors pursue the sale of the company, said Linda Lennox, director of investor relations. She explained that the lead lender on NUI's existing credit, Fleet Securities, led NUI toward the third party, but Fleet is not involved in the proposed debt.
She would not name the third-party lender, but said the financing has yet to be secured. "NUI is pursuing other alternatives to provide NUI Utilities with sufficient credit capacity to continue to satisfy its short-term needs in the event the $50 million facility is not obtained," the Bedminster, N.J.-based company said in a release. A Fleet official declined to comment.
The company said the decision to go on the block stems from the negative impact on the company resulting from recent credit downgrades and adverse business conditions. Berenson & Co. is advising NUI, a natural gas distribution company, but Lennox said the company is currently looking for another adviser in the sale. "We have three or four [advisers] we have narrowed it down to," she said, noting that the company was interviewing candidates last week.