* To sell for $350 ml cash
* To retain 48.4 pct in JV after sale
* Deal to immediately add to Midcoast earnings
(Adds details, share movement)
June 19 (Reuters) - Enbridge Energy Partners LP said it would sell a 12.6 percent interest in its natural gas midstream business to partner Midcoast Energy Partners LP for $350 million.
The deal will immediately add to the earnings of Midcoast Energy (MEP), which said it would finance it with debt.
Enbridge Energy (EEP), a master limited partnership (MLP) of Canada's No. 1 pipeline company Enbridge Inc , said it would use the proceeds to help fund its pipeline expansion program.
"EEP's drop-down plans for MEP are pivotal components of its funding program," EEP President Mark Maki said in a statement on Thursday.
EEP's interest in Midcoast Operating LP will fall to 48.4 percent after the all-cash deal, expected to close by July.
Companies holding midstream assets and structured as MLPs are favored by investors as they distribute most of their earnings to shareholders.
The MLP structure allows companies to raise money in the stock market while being taxed only at the unit-holder level, avoiding corporate income taxes.
(Reporting by Kanika Sikka in Bangalore; Editing by Kirti Pandey and Joyjeet Das)