Genesis Energy, L.P. Implements Cost Savings Initiatives and Amends Senior Secured Credit Facility
July 30 2020 - 6:00AM
Business Wire
Genesis Energy, L.P. (NYSE: GEL) announced today that it has
implemented certain cost savings measures that are expected to
result in annual savings of approximately $38 million dollars
starting in the third quarter of 2020. In conjunction with these
measures, Genesis has executed an amendment to its existing senior
secured credit facility that will add back to Adjusted Consolidated
EBITDA (as calculated under our senior secured credit facility)
approximately $13.5 million dollars of one-time charges associated
with our cost savings initiatives for the test period ending June
30, 2020 and for each of the following three test periods.
In addition to the add back, and to help us manage the near-term
uncertainty around the COVID-19 pandemic, our Consolidated Leverage
Ratio covenant will increase to 5.75x in 3Q 2020 through 1Q 2021
and then revert back to 5.50x for the remaining term of the
facility, which currently runs through May of 2022. Also, our
Consolidated Interest Coverage Ratio covenant will decrease to
2.75x in 3Q 2020 through 1Q 2021 and then revert back to 3.00x for
the remaining term of the facility.
Grant Sims, CEO of Genesis Energy, said, “Given the current
operating environment and near-term challenges with the COVID-19
pandemic, we made the difficult yet prudent decision to right size
our work force, which is expected to result in significant
long-term recurring cost savings. While we currently don’t expect
to have any issues with our existing covenants, we made the
proactive decision with the unanimous support of our lender group
to increase our Consolidated Leverage Ratio covenant by a full
quarter turn through the first quarter of 2021. The bank group
recognizes the long term fundamentals of our businesses are strong
and that the negative effects of the COVID-19 pandemic will pass.
Despite the headwinds, we remain on track to be cash flow positive
and a net payer of debt in 2020 and beyond.”
Genesis Energy, L.P. is a diversified midstream energy master
limited partnership headquartered in Houston, Texas. Genesis’
operations include offshore pipeline transportation, sodium
minerals and sulfur services, marine transportation and onshore
facilities and transportation. Genesis’ operations are primarily
located in the Gulf Coast region of the United States, Wyoming and
the Gulf of Mexico.
This press release includes forward-looking statements as
defined under federal law. Although we believe that our
expectations are based upon reasonable assumptions, we can give no
assurance that our goals will be achieved. Actual results may vary
materially. All statements, other than statements of historical
facts, included in this press release that address activities,
events or developments that we expect, believe or anticipate will
or may occur in the future, including but not limited to statements
relating to future financial and operating results, the impact of
our cost saving measures and the amount of such costs savings, the
COVID-19 pandemic, and our strategy and plans, are forward-looking
statements, and historical performance is not necessarily
indicative of future performance. Those forward-looking statements
rely on a number of assumptions concerning future events and are
subject to a number of uncertainties, factors and risks, many of
which are outside our control, that could cause results to differ
materially from those expected by management. Such risks and
uncertainties include, but are not limited to, weather, political,
economic and market conditions, including a decline in the price
and market demand for products, the outbreak or continued spread of
disease, and other uncertainties that are described more fully in
our Annual Report on Form 10-K for the year ended December 31, 2019
filed with the Securities and Exchange Commission and other
filings, including our Current Reports on Form 8-K and Quarterly
Reports on Form 10-Q. We undertake no obligation to publicly update
or revise any forward-looking statement.
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version on businesswire.com: https://www.businesswire.com/news/home/20200730005161/en/
Genesis Energy, L.P. Ryan Sims SVP – Finance and Corporate
Development (713) 860-2521
Genesis Energy (NYSE:GEL)
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