including those acquired in the Unit Purchases) to the exercise of the limited call right (the Limited Call Right) provided for in Section15.1(a)of the Second Amended and Restated Agreement of Limited Partnership of EQGP, dated as of October12, 2018 (as may be amended from time to time, the EQGP Partnership Agreement), at a price per EQGP Common Unit not less than the Purchase Price. After giving effect to the exercise of the Limited Call Right, ETRN and its affiliates will own all the outstanding EQGP Common Units. If one or more Closings do not occur such that ETRN and its affiliates do not own more than 95% of the outstanding EQGP Common Units, ETRN may not be able to exercise the Limited Call Right. For purposes of calculating the number of EQGP Common Units owned by ETRN and its affiliates, directors and officers of ETRN and EQGP are deemed not to be “affiliates.”

Debt Commitment Letter

On November28, 2018, ETRN entered into a commitment letter (the Debt Commitment Letter) with Goldman Sachs Bank USA, Guggenheim Securities, LLC (collectively, the Arrangers) and certain financing sources party thereto (Goldman Sachs Bank USA and such financing sources, the Commitment Parties) to which the Commitment Parties have committed to provide ETRN with a senior secured term loan B facility of up to an aggregate principal amount of $650 million (the Term Facility). The Term Facility will be available to ETRN to finance, among other things, the Unit Purchases, the exercise of the Limited Call Right and the payment of associated fees and expenses, subject to customary conditions contained in the Debt Commitment Letter, including, without limitation, (a)the execution and delivery of definitive documentation, (b)the substantially concurrent consummation of the Unit Purchases and (c)since November12, 2018, there not occurring a material adverse effect on the business, operations or financial condition of ETRN and its subsidiaries, taken as a whole.

Proposed IDR Transaction

On November30, 2018, ETRN made a proposal to the board of directors of EQMMidstreamServices,LLC, a Delaware limited liability company (the EQM General Partner) and the general partner of EQM, conditioned upon completion of the Limited Call Right such that EQGP is a wholly-owned subsidiary of ETRN, to which to ETRN would exchange the incentive distribution rights (IDRs) and general partner units in EQM that it holds, directly or indirectly, for (a)newly-issued common units (EQM Common Units) representing limited partner interests in EQM and newly-issued payment-in-kind units (EQM PIK Units) representing limited partner interests in EQM, and (b)a non-economic general partner interest in EQM (the Proposed IDR Transaction). The Proposed IDR Transaction would be accomplished by merging a subsidiary of EQM with and into EQGP, with EQGP surviving as a wholly-owned subsidiary of EQM. In the merger, (i)ETRN’s noneconomic general partner interest in EQGP would be exchanged for the noneconomic general partner interest in EQM, (ii)ETRN’s economic interests in EQGP would be exchanged for a combination of EQM Common Units and EQM PIK Units and (iii)the incentive distribution rights and economic general partner interest in EQM held by EQGP would be cancelled. The aggregate number of EQM Common Units and EQM PIK Units issued by EQM in the Proposed IDR Transaction would be 95 million.

The EQM PIK Units would be a new class of units identical to EQM Common Units in all respects except that distributions on the EQM PIK Units would be paid through the issuance of additional EQM PIK Units. The EQM PIK Units would automatically convert into newly-issued EQM Common Units on a one-for-one basis (subject to adjustments for any unit split or combination or other similar transaction) at a date to be determined. The Proposed IDR Transaction is subject to negotiation with the board of directors of EQM or its conflicts committee and there can be no assurances that the Proposed IDR Transaction is completed on the terms set forth herein or at all.

ADDITIONAL INFORMATION

As of the date of this Current Report on Form8-K, ETRN has not acquired the EQGP Common Units subject to the Unit Purchase Agreements and has not exercised the Limited Call Right. However, the execution of the Unit Purchase Agreements may be deemed to constitute a step towards one or more transactions that may constitute a “Rule13e-3 transaction” under the rulesand regulations of the Securities and Exchange Commission (the SEC) to the Exchange Act. Accordingly, ETRN filed a Transaction Statement on Schedule 13E-3 with the SEC on November30, 2018. No Unit Purchases will occur until at least 30 days after the filing of such

Transaction Statement on Schedule 13E-3 in order to satisfy the requirements of Rule13e-3 and the Transaction Statement on Schedule 13E-3.

CAUTIONARY STATEMENTS

Disclosures in this Current Report on Form8-K contain certain forward-looking statements within the meaning of Section21E of the Exchange Act, and Section27A of the Securities Act. Statements that do not relate strictly to historical or current facts are forward-looking. Without limiting the generality of the foregoing, forward-looking statements contained in this Current Report on Form8-K specifically include the expected exercise of the Limited Call Right and closing of the Unit Purchases; the ability to execute the Proposed IDR Transaction; the expected terms of the Proposed IDR Transaction; and the expected timing of closing the transactions. These statements involve risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. EQGP has based these forward-looking statements on current expectations and assumptions about future events. While EQGP considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks and uncertainties, many of which are difficult to predict and beyond EQGP’s control. The risks and uncertainties that may affect the operations, performance and results of EQGP’s business and forward-looking statements include, but are not limited to, those risks discussed in ETRN’s Registration Statement on Form10 and ETRN’s, EQGP’s and EQM’s other filings with the SEC.

Any forward-looking statement speaks only as of the date on which such statement is made and EQGP does not intend to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

EQGP Holdings, LP Exhibit
EX-99.1 2 a18-40194_2ex99d1.htm EX-99.1 Exhibit 99.1     Equitrans Midstream to Acquire 100% Ownership of EQGP through Negotiated Purchases and Limited Call Right   Commencement of Structure Simplification Plans,…
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