NGL Energy Partners LP Announces Sale of Southeast Refined Products Assets
August 08 2019 - 6:30AM
Business Wire
NGL Energy Partners LP (NYSE:NGL) (“NGL,” “our,” or the
“Partnership”) today announced that it has signed a definitive
agreement to sell TransMontaigne Product Services, LLC ("TPSL") and
associated assets to a strategic buyer with substantial assets for
estimated proceeds of approximately $300 million, including equity
consideration, inventory, and net working capital, based on June
30, 2019 values and subject to actual values at closing. The
Partnership also expects to significantly reduce letter of credit
commitments following the sale. TPSL makes up a portion of NGL's
Refined Products reporting segment.
The divested assets include:
- TPSL Terminaling Services Agreement with TransMontaigne
Partners LP, including the exclusive rights to utilize 18
terminals;
- Line space along Colonial and Plantation Pipelines;
- 2 wholly-owned refined products terminals in Georgia and
multiple third-party throughput agreements; and
- All associated customer contracts, inventory and other working
capital associated with the assets.
Proceeds from this transaction will be used to reduce
outstanding indebtedness under the Partnership’s revolving credit
facility.
“NGL continues to focus on its core areas where we have
competitive strength. These focus areas generate stable and
predictable cash flows as we grow our mix of long-term contracted
revenues. The sale of TPSL is part of this strategy and a result of
the strategic review of the Refined Products business announced
earlier this year," stated Mike Krimbill, NGL's CEO. "Along with
the significant reduction in inventory and working capital
associated with this business, this transaction reduces borrowings
on our working capital revolver and enhances the Partnership's
liquidity and overall leverage profile. Managing our leverage and
cost of capital are fundamental to our business strategy as we
continue our strategic growth plan while maintaining focus on a
strong balance sheet."
The transaction is subject to certain regulatory and other
customary closing conditions and is expected to close during the
second fiscal quarter.
Advisors and Counsel
TD Securities (USA) LLC and Credit Suisse Securities (USA) LLC
are acting as financial advisors to NGL. Winston & Strawn LLP
is acting as legal counsel to NGL.
Forward-Looking Statements
Certain matters contained in this Press Release include
"forward-looking statements." All statements, other than statements
of historical fact, included in this Press Release may constitute
forward-looking statements. Although we believe that the
expectations reflected in these forward-looking statements are
reasonable, we cannot assure you that these expectations will prove
to be correct. These forward-looking statements are subject to
certain known and unknown risks and uncertainties, as well as
assumptions that could cause actual results to differ materially
from those reflected in these forward-looking statements. Factors
that might cause actual results to differ include, but are not
limited to, the risk factors discussed from time to time in each of
our documents and reports filed with the SEC.
Readers are cautioned not to place undue reliance on any
forward-looking statements contained in this Press Release, which
reflect management's opinions only as of the date hereof. Except as
required by law, we undertake no obligation to revise or publicly
release the results of any revision to any forward-looking
statements.
About NGL Energy Partners LP
NGL Energy Partners LP is a Delaware limited partnership. NGL
owns and operates a vertically integrated energy business with four
primary businesses: water solutions, crude oil logistics, NGL
logistics and refined products/renewables. For further information,
visit the Partnership’s website at www.nglenergypartners.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20190808005244/en/
NGL Energy Partners LP Trey Karlovich, 918.481.1119 Executive
Vice President and Chief Financial Officer Trey.Karlovich@nglep.com
or Linda Bridges, 918.481.1119 Senior Vice President – Finance and
Treasurer Linda.Bridges@nglep.com
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