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TRANSCO CLOSES SALE OF NEW PREFERRED SHARES

 HOUSTON, Nov. 3 /PRNewswire/ -- Transco Energy Company (NYSE: E) has completed the sale of 2.5 million shares of newly issued cumulative convertible preferred stock for $125 million. The stock has a dividend rate of 7 percent; is convertible into Transco common stock at $20 per common share, which is equivalent to a conversion rate of 2.5 shares of common stock for each share of preferred stock; and is redeemable at the company's option in 1999. Transco used the proceeds from the sale to fund its previously announced agreement to repurchase 3.03 million shares of Transco 9.25 percent convertible preferred stock held by corporate partners. Merrill Lynch & Co. was underwriter for the issue.
 Transco Energy Company Chairman, President and Chief Executive Officer John P. DesBarres said, "We have taken advantage of this opportunity to issue new preferred shares with a lower dividend rate and use the proceeds to repurchase the 9.25 percent preferred stock. This action again demonstrates our commitment to improve our financial condition and consolidated financial results. With this new preferred stock, we've eliminated the mandatory redemption obligation of the 9.25 percent preferred and lowered our preferred dividend payments by almost $3 million annually. This will improve our balance sheet and increase income available to common, providing a better return to our common stockholders."
 Transco Energy Company transports natural gas through its interstate pipeline systems to markets in the eastern and midwestern United States and arranges for the transportation and sale of natural gas throughout the U.S. Transco also maintains modest positions in other energy- related businesses.
 -0- 11/3/93
 /CONTACT: Katherine K. Putnam, 713-439-2455, or (analysts) R. Dean Ayers, 713-439-2593, both of Transco Energy Company/
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CO: Transco Energy Company ST: Texas IN: OIL SU:

CK -- NY079 -- 3139 11/03/93 14:32 EST
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Publication:PR Newswire
Date:Nov 3, 1993
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