LinnCo wraps offer to exchange LINN Energy units for LinnCo shares

By Marisa Wong

Morgantown, W.Va., Aug. 2 – LinnCo, LLC disclosed the final results of its previously announced offer to exchange each outstanding unit of LINN Energy, LLC for one LinnCo share under a prospectus dated April 26.

An aggregate of 123,909,317 LINN units – including units previously accepted for exchange during the initial offering period – representing about 35% of LINN’s issued and outstanding units, were tendered and have been accepted by LinnCo for exchange.

Of those units, 19,954,774 were tendered during the exchange offer’s subsequent offering period that expired at midnight ET on Aug. 1, according to a Tuesday press release.

LinnCo has promptly issued new LinnCo shares for all of the tendered LINN units. LinnCo now owns roughly 71% of LINN’s issued and outstanding units.

LINN had filed for bankruptcy on May 11, and on May 16 the court authorized the company to continue the exchange offer throughout the debtors’ Chapter 11 proceedings.

The purpose of the exchange offer was to permit holders of LINN Energy units to maintain their economic interest in LINN Energy through LinnCo, an entity that is taxed as a corporation rather than a partnership, which would allow LINN Energy unitholders to avoid future allocations of taxable income and loss, including cancellation of debt income, that could result from future debt restructurings or other strategic transactions by LINN Energy.

The Chapter 11 filing did not cause LINN to recognize cancellation of debt income. However, it is likely that the final resolution of a bankruptcy plan would cause LINN to recognize an amount of cancellation of debt income, which may be substantial, the company noted.

American Stock Transfer & Trust Co. was the exchange agent.

LINN Energy is an oil and gas company. LinnCo, through its limited liability company interests in LINN Energy, focuses on the acquisition and development of oil and natural gas properties. Both are based in Houston. The Chapter 11 case number is 16-60040.

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