Martin Midstream Partners Announces Agreement to Divest of Corpus Christi Terminalling Assets & Quarterly Cash Distribution &...
October 20 2016 - 4:01PM
Martin Midstream Partners L.P. (NASDAQ:MMLP) (“MMLP” or the
“Partnership”) announced today that it has entered into a
definitive agreement with NuStar Logistics, L.P. to sell certain of
its terminalling assets located in Corpus Christi, Texas for gross
consideration of $107 million plus the reimbursement of certain
capital expenditures and prepaid items (the “Transaction”).
The Partnership is selling its 900,000 barrel crude oil
storage terminal commonly known as the Corpus Christi crude
terminal, its refined product barge terminal, certain pipelines and
related easements as well as dockage and trans-loading assets
(collectively known as the “Assets”). MMLP expects to receive
net proceeds of approximately $93 million after transaction fees
and expenses, in addition to certain cash payments previously
received by the Partnership in conjunction with its mandated
relocation of certain dockage assets.
The Transaction is subject to customary closing
conditions, including antitrust approval. The Partnership
expects to close the Transaction prior to year-end 2016.
Simmons & Company International served as exclusive financial
advisor to MMLP on the Transaction.
Concurrent with the announced disposition of the
Assets, the Partnership also announced it has declared a quarterly
cash distribution of $0.50 per unit, or $2.00 per unit on an
annualized basis, for the quarter ended September 30, 2016.
The quarterly distribution represents a reduction of
approximately 38.5% from the distribution paid following the second
quarter 2016. The distribution is payable on November 14,
2016 to common unitholders of record as of the close of business on
November 7, 2016. The ex-dividend date for the cash
distribution is November 3, 2016.
Ruben Martin, President and Chief Executive
Officer of Martin Midstream GP LLC said, “This sale of assets is a
significant positive event for the Partnership and a necessary
first step to ultimately returning MMLP to a growth
trajectory. While these assets have historically performed
well for the Partnership, they are not critical to its success
moving forward. Given our focus on reduction of leverage, we
feel this asset sale and distribution right-sizing are prudent
moves for the Partnership at this time. Together, these two
actions should provide a sound catalyst to reducing our currently
elevated cost of capital by de-levering and improving increased
distribution coverage to our unitholders. Looking ahead, we
anticipate that these efforts will improve the balance sheet and
result in estimated distribution coverage of at least 1.20 times in
2017 and 2018.”
Martin Midstream Partners plans to publicly
release its financial results for the third quarter ended September
30, 2016 after the market closes on Wednesday, October 26, 2016.
An investors conference call to review the third quarter
results will be held on Thursday, October 27, 2016 at 8:00 a.m.
Central Time. The conference call can be accessed by calling (877)
878-2695. An audio replay of the conference call will be
available by calling (855) 859-2056 from 11:00 a.m. Central Time on
October 27, 2016 through 10:59 p.m. Central Time on November 7,
2016. The access code for the conference call and the audio
replay is Conference ID No. 94610525. The audio replay of the
conference call will also be archived on Martin Midstream Partners’
website at www.martinmidstream.com.
During the conference call, management will
discuss certain non-generally accepted accounting principle
financial measures for which reconciliations to the most directly
comparable GAAP financial measures will be provided in Martin
Midstream Partners’ announcement concerning its financial results
for the quarter ended September 30, 2016 which will be available on
the investor relations page of Martin Midstream Partners’
website.
Qualified Notice to Nominees
This release serves as qualified notice to
nominees as provided for under Treasury Regulation Section
1.1446-4(b)(4) and (d). Please note that 100 percent of the
Partnership's distributions to foreign investors are attributable
to income that is effectively connected with a United States trade
or business. Accordingly, all of the Partnership's distributions to
foreign investors are subject to federal income tax withholding at
the highest effective tax rate for individuals or corporations, as
applicable. Nominees, and not the Partnership, are treated as
withholding agents responsible for withholding on the distributions
received by them on behalf of foreign investors.
About Martin Midstream Partners
Martin Midstream Partners L.P. is a publicly
traded limited partnership with a diverse set of operations focused
primarily in the United States Gulf Coast region. The
Partnership's primary business lines include: (1) terminalling,
storage and packaging services for petroleum products and
by-products; (2) natural gas liquids transportation and
distribution services and natural gas storage; (3) sulfur and
sulfur-based products processing, manufacturing, marketing and
distribution; and (4) marine transportation services for petroleum
products and by-products.
Forward-Looking Statements
Statements about Martin Midstream Partners'
outlook and all other statements in this release other than
historical facts are forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements and all references to financial
estimates rely on a number of assumptions concerning future events
and are subject to a number of uncertainties and other factors,
many of which are outside its control, which could cause actual
results to differ materially from such statements. While Martin
Midstream Partners believes that the assumptions concerning future
events are reasonable, it cautions that there are inherent
difficulties in anticipating or predicting certain important
factors. A discussion of these factors, including risks and
uncertainties, is set forth in Martin Midstream Partners' annual
and quarterly reports filed from time to time with the Securities
and Exchange Commission. Martin Midstream Partners disclaims any
intention or obligation to revise any forward-looking statements,
including financial estimates, whether as a result of new
information, future events, or otherwise.
Additional information concerning Martin
Midstream is available on its website at www.martinmidstream.com,
or by contacting:
Joe McCreery, IRC – Vice President - Finance
& Head of Investor Relations(903) 988-6425
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