Martin Midstream Partners L.P. (Nasdaq: MMLP) (the “Partnership”)
today announced the expiration at 5:00 p.m., New York City time, on
August 7, 2020 (the “Expiration Time”) of its and its subsidiary,
Martin Midstream Finance Corp.’s (“FinanceCo” and, together with
the Partnership, the “Issuers”) previously announced (1) offer to
exchange (the “Exchange Offer”) any and all of the Issuers’
outstanding 7.25% senior unsecured notes due 2021 (the “Existing
Notes”) held by Eligible Holders (as defined below) of record for a
combination of cash, 11.50% Senior Secured Second Lien Notes due
2025 (the “Exchange Notes”), and rights to acquire (the “Rights
Offering”) 10.00% Senior Secured 1.5 Lien Notes due 2024 (the “New
Notes”), as further described below, upon the terms and subject to
the conditions set forth in the confidential Exchange Offer
Memorandum, Consent Solicitation, Rights Offering, and Disclosure
Statement Soliciting Acceptances of a Prepackaged Plan of
Reorganization, dated July 9, 2020 (as may be amended or
supplemented from time to time, the “Offering Memorandum” and,
together with the related Exchange Offer letter of transmittal and
the related Exchange Offer eligibility letter, the “Exchange Offer
Documents”), and (2) offer to purchase for cash (the “Cash Tender
Offer” and, together with the Exchange Offer, the “Offers”, and
each an “Offer”) any and all of the Existing Notes held by Other
Holders (as defined below), on the terms and subject to the
conditions set forth in the Offer to Purchase and Consent
Solicitation Statement, dated July 9, 2020 (the “Offer to Purchase”
and, together with the related Cash Tender Offer letter of
transmittal and the related Cash Tender Offer eligibility letter,
the “Cash Tender Offer Documents”), and the consent solicitations
(the “Consent Solicitations”) related to the adoption of proposed
amendments to the indenture governing the Existing Notes (the
“Proposed Amendments”), as described in the Offering Memorandum and
the Offer to Purchase. The Proposed Amendments will not be
operative until the Exchange Offer and Cash Tender Offer are
consummated according to their terms. Any outstanding Existing
Notes are subject to the terms of the agreements implementing the
Proposed Amendments.
As of the Expiration Time, according to Epiq Corporate
Restructuring, LLC, the exchange agent for the Exchange Offer and
related Consent Solicitation and the depositary and information
agent for the Cash Tender Offer and related Consent Solicitation,
the aggregate principal amount of Existing Notes validly tendered
and not validly withdrawn in the Offers at or prior to the
Expiration Time was $335,666,000, or approximately 92.1% of the
$364,456,000 of outstanding Existing Notes, as set forth in the
table below.
Title of Notes |
|
AggregateOutstanding |
|
Election Option |
|
Principal AmountTendered by ExpirationTime |
Percent Tenderedby ExpirationTime |
7.25% Senior Unsecured Notes due
2021 |
|
|
|
|
Exchange Offer Option 1 – Cash Election |
|
$1,427,000 |
0.4 |
% |
|
$364,456,000 |
|
Exchange Offer Option 2 – Exchange Notes Election |
|
$34,589,000 |
9.5 |
% |
|
|
|
Exchange Offer Option 3 – New Notes and Exchange Notes
Election |
|
$298,425,000 |
81.9 |
% |
|
|
|
Cash
Tender Offer |
|
$1,225,000 |
0.3 |
% |
Total |
|
|
|
|
|
$335,666,000 |
92.1 |
% |
As previously announced, the required amount of consenting
supporting senior noteholders of the Existing Notes party to the
Restructuring Support Agreement, dated as of June 25, 2020 (as
amended and previously disclosed in the Partnership’s Current
Reports on Form 8-K filed on July 9, 2020 and August 6, 2020, the
“RSA”), which was attached as Exhibit 10.1 to the Partnership’s
Current Report on Form 8-K filed on June 26, 2020, agreed to reduce
the minimum participation condition under the RSA to at least 92%
in aggregate principal amount of the Existing Notes as of the
Expiration Time. The minimum participation condition has been
satisfied, and the Partnership expects to accept all tendered
Existing Notes, subject to satisfaction of the conditions set forth
in the Offering Memorandum and the Offer to Purchase, and expects
to pay the applicable consideration with respect to such Existing
Notes on August 12, 2020 (such date and time with respect to an
Offer, as the same may be extended with respect to such Offer, the
“Settlement Date”).
Exchange Offer
Pursuant to the terms of the Exchange Offer, Eligible Holders
who validly tendered and did not validly withdraw their Existing
Notes and their consents on or prior to 5:00 p.m., New York City
time, on July 23, 2020 (the “Early Participation Date”) will
receive total consideration for each $1,000 in principal amount of
Existing Notes tendered of either (1) $650 in cash (“Option
1”), (2) $1,000 in principal amount of Exchange Notes (“Option 2”),
or (3) (a) the right to acquire an Eligible Holder’s pro rata share
of $50.0 million of New Notes, the proceeds of which will be used
to fund the cash portion of the Exchange Offer and the Cash Tender
Offer, to purchase Existing Notes on a pro rata basis from Eligible
Holders that participate in the Rights Offering with Excess
Proceeds (as defined below), if any, and any remaining proceeds
will be used for general partnership purposes and (b) $1,000 in
principal amount of Exchange Notes for such Eligible Holder’s
Existing Notes remaining after application of the Excess Proceeds
(“Option 3”), at the option of each Eligible Holder that elects to
participate in the Exchange Offer, subject to adjustments as
described in the Offering Memorandum. Eligible Holders who validly
tendered their Existing Notes after the Early Participation Date
but at or prior to the Expiration Time will receive exchange
consideration for each $1,000 in principal amount of Existing Notes
tendered of either (i) $600 cash or (ii) $950 principal amount of
Exchange Notes.
Because the amount of cash consideration required to be paid
pursuant to the cash portion of the Exchange Offer and the Cash
Tender Offer (the “Total Cash Consideration”) is less than $50.0
million, the Partnership will first purchase Existing Notes from
each Eligible Holder electing Option 3, on a pro rata basis based
upon such Eligible Holder’s participation in the Rights Offering
relative to all Eligible Holders who participated in the Rights
Offering, with Excess Proceeds at a purchase price equal to $1,000
per Existing Note, and the balance of Existing Notes each such
Eligible Holder tendered that were not accepted for purchase for
cash will be exchanged into Exchange Notes as if such Eligible
Holder had made an election pursuant to Option 2 with respect to
such balance of Existing Notes. “Excess Proceeds” will be an amount
equal to (i) the difference between $50.0 million and the Total
Cash Consideration multiplied by (ii) 0.85.
Upon the terms and subject to the conditions set forth in the
Exchange Offer Documents, the Partnership expects that it will (1)
pay approximately $41,966,510 in cash, (2) issue approximately
$291,969,885 aggregate principal amount of Exchange Notes and (3)
pursuant to the Rights Offering, issue approximately $53,750,000
aggregate principal amount of New Notes, which amount includes the
$3.75 million backstop fee, in consideration for the Existing Notes
expected to be accepted in the Exchange Offer. Eligible Holders of
Existing Notes accepted for exchange will also receive accrued and
unpaid interest from and including February 15, 2020 until the
Settlement Date.
The Exchange Offer and Rights Offering were made, and the
applicable exchange consideration was offered and will be issued,
only to holders (1) who are (x) “qualified institutional buyers”
(“QIBs”), as defined in Rule 144A under the Securities Act of 1933,
as amended (the “Securities Act”), or (y) institutional “accredited
investors” as defined in Rule 501(a)(1), (2), (3), and (7) of
Regulation D (“Regulation D”) of the Securities Act (“Institutional
Accredited Investors”), in each case, in a private transaction in
reliance upon an applicable exemption from the registration
requirements of the Securities Act, such as those provided by
Section 4(a)(2) and/or Regulation D, and (2) outside the United
States, who are not “U.S. persons” (“Non-U.S. Persons”), as defined
in Regulation S (“Regulation S”) under the Securities Act, in
offshore transactions in reliance upon an applicable exemption from
the registration requirements of the Securities Act, such as that
provided by Regulation S (“Eligible Holders”). Only Eligible
Holders are authorized to receive the Offering Memorandum and to
participate in the Exchange Offer and Rights Offering. The Exchange
Offer is made only by, and pursuant to, the terms set forth in the
Offering Memorandum.
If and when issued, the Exchange Notes and the New Notes will
not be registered under the Securities Act or with any securities
regulatory authority of any state or other jurisdiction. Therefore,
the Exchange Notes and the New Notes may not be offered or sold in
the United States or to or for the account or benefit of any U.S.
persons except pursuant to an offering or sale registered under, an
exemption from or in a transaction not subject to the registration
requirements of the Securities Act and any applicable state
securities laws.
Cash Tender Offer
Pursuant to the terms of the Cash Tender Offer, the
consideration for each $1,000 principal amount of the Existing
Notes validly tendered by Other Holders after the Early
Participation Date and accepted by the Issuers for purchase
pursuant to the Cash Tender Offer is $600. Other Holders who
validly tendered and did not validly withdraw their Existing Notes
and their consents on or prior to the Early Participation Date will
receive total consideration of $650 for each $1,000 principal
amount of the Existing Notes validly tendered and accepted by the
Issuers for purchase pursuant to the Cash Tender Offer.
Upon the terms and subject to the conditions set forth in the
Cash Tender Offer Documents, the Partnership expects that it will
pay approximately $791,250 in cash, as consideration for the
Existing Notes expected to be accepted in the Cash Tender Offer.
Each Other Holder will also receive accrued and unpaid interest on
its Existing Notes from February 15, 2020 up to, but not including,
the Settlement Date for all of its Existing Notes validly tendered
and accepted by the Issuers for purchase pursuant to the Cash
Tender Offer.
Holders of Existing Notes that are not QIBs, not Institutional
Accredited Investors and not Non-U.S. Persons are eligible to
participate in the Cash Tender Offer (such holders, the “Other
Holders”). Eligible Holders are not Other Holders, and therefore
not eligible to participate in the Cash Tender Offer. The Cash
Tender Offer is made only by, and pursuant to, the terms set forth
in the Offer to Purchase.
Additional Information
This press release is for informational purposes only and does
not constitute an offer to purchase or exchange or a solicitation
of an offer to purchase or exchange any Existing Notes or an offer
to sell securities. The Exchange Offer, the related Consent
Solicitation, the Rights Offering and the related plan solicitation
are being made solely through, and pursuant to the terms of the
confidential Offering Memorandum. The Cash Tender Offer and
the related Consent Solicitation are being made solely through, and
pursuant to, the terms of the confidential Offer to Purchase. The
Offers are not be made to holders of the Existing Notes in any
jurisdiction in which the making or acceptance thereof would not be
in compliance with the securities, blue sky or other laws of such
jurisdiction. The Exchange Notes and the New Notes issuable upon
exercise of the rights in the Rights Offering are also subject to
further restrictions on transfer as set forth in the Offering
Memorandum.
About Martin Midstream Partners L.P.
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, processing, storage, and
packaging services for petroleum products and by-products; (2) land
and marine transportation services for petroleum products and
by-products, chemicals, and specialty products; (3) sulfur and
sulfur-based products processing, manufacturing, marketing and
distribution; and (4) natural gas liquids marketing, distribution
and transportation services.
Forward Looking Statements
Statements about the Partnership’s 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, including (i) the current and potential
impacts of the COVID-19 pandemic generally, on an industry-specific
basis, and on the Partnership’s specific operations and business,
(ii) the Partnership’s ability to refinance its senior unsecured
notes due February 15, 2021 prior to August 19, 2020, (iii) the
Partnership’s pursuit of strategic alternatives, (iv) the effects
of the continued volatility of commodity prices and the related
macroeconomic and political environment, and (v) other factors,
many of which are outside its control, which could cause actual
results to differ materially from such statements. While the
Partnership 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 the Partnership’s annual and quarterly reports filed from time
to time with the Securities and Exchange Commission (the “SEC”).
The Partnership 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 except
where required to do so by law.
The information in the Partnership’s website is not, and shall
not be deemed to be, a part of this notice or incorporated in
filings the Partnership makes with the SEC.
Additional information concerning the Partnership is
available on the Partnership’s website at www.MMLP.com or by
contacting:
Sharon Taylor – Head of Investor Relations(877) 256-6644
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