MIDLAND, Texas, Aug. 8, 2016 /PRNewswire/ -- CSI Compressco LP
(NASDAQ: CCLP) ("CSI Compressco" or the "Partnership") today
announced that it has closed a private placement (the "Private
Placement") of approximately 4.4 million Series A Convertible
Preferred Units (the "Preferred Units") at a cash purchase price of
$11.43 per Preferred Unit (the "Issue
Price") pursuant to a Series A Preferred Unit Purchase Agreement
(the "Purchase Agreement") with the purchasers party thereto
(collectively, the "Purchasers"). The Preferred Units will
pay quarterly distributions in additional Preferred Units equal to
an annual rate of 11.00% of the Issue Price, subject to certain
adjustments. After seven months, a ratable portion of the Preferred
Units will convert into common units monthly over a total of thirty
months. The Partnership will also have the option to satisfy a
portion of the monthly conversions with cash payments. In
addition, the Preferred Units will be convertible into common
units, generally on a one-for-one basis, subject to certain
adjustments, at the holders' option after May 31, 2017. Within 45 days of the closing date,
one of the Purchasers may exercise an option to purchase up to an
additional $20 million of Preferred
Units on the same terms and conditions.
The Partnership will receive net proceeds, after deducting
offering expenses and transaction fees, from the Private Placement
of approximately $48 million. The
Partnership will use the net proceeds from this offering to reduce
the Partnership's outstanding indebtedness. Evercore Group L.L.C.
is acting as the Partnership's financial advisor for the
transaction and the primary purchasers include, among others,
affiliates of Hudson Bay Capital Management LP and TETRA
Technologies, Inc. (NYSE:TTI). A subsidiary of TETRA Technologies,
Inc. purchased $10 million of
Preferred Units in the private placement.
"We welcome the relationship with Hudson Bay Capital and
appreciate the confidence exhibited by TETRA Technologies, Inc.,
our largest unitholder and the owner of our general partner, with
its participation in this private placement." CSI Compressco
President, Timothy Knox said. "This
transaction delivers funding to the Partnership as a partial
recapitalization which will strengthen our balance sheet and
improve liquidity as we manage an extended downturn in the oil and
gas industry, providing long-term value for all unitholders and
allowing us to remain focused on execution of business objectives
as we move forward."
Sander Gerber, CIO of Hudson Bay
Capital Management, said, "We are excited to enter into this
relationship with CSI Compressco LP, and are enthusiastic about its
future prospects. This investment improves CSI Compressco LP's
balance sheet by reducing its leverage, while enhancing its
financial flexibility."
The securities offered in the private placement have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act"), or applicable state securities laws, and
accordingly may not be offered or sold in the United States except pursuant to an
effective registration statement or an applicable exemption from
the registration requirements of the Securities Act and such
applicable state securities laws. The Partnership is required
to file a registration statement with the SEC for the resale of the
common units underlying the Preferred Units by the Purchasers
within 90 days after the closing date. The Purchase Agreement
includes representations, warranties, covenants and other terms
typical of a transaction of this type, the full description of
which can be reviewed in documents attached to the Partnership's
Current Report on Form 8-K concurrently being filed with the SEC.
You may also obtain these documents for free when they are
available by visiting the SEC's web site at www.sec.gov.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy these securities, nor shall there
be any sale of these securities in any state or jurisdiction in
which the offer, solicitation or sale of these securities would be
unlawful prior to registration or qualification under the
securities laws of any such state or jurisdiction.
About CSI Compressco
CSI Compressco is a provider of compression services and
equipment for natural gas and oil production, gathering,
transportation, processing, and storage. CSI
Compressco's compression and related services business
includes a fleet of over 6,000 compressor packages with in excess
of 1.1 million in aggregate horsepower, utilizing a full spectrum
of low-, medium-, and high-horsepower engines. CSI
Compressco also provides well monitoring and automated sand
separation services in conjunction with compression services
in Mexico. CSI Compressco's equipment sales business
includes the fabrication and sale of standard compressor packages,
custom-designed compressor packages, and oilfield fluid pump
systems designed and fabricated primarily at our facility
in Midland, Texas. CSI Compressco's aftermarket
business provides compressor package reconfiguration and
maintenance services as well as the sale of compressor package
parts and components manufactured by third-party
suppliers. CSI Compressco's customers comprise a broad
base of natural gas and oil exploration and production, mid-stream,
transmission, and storage companies operating throughout many of
the onshore producing regions of the United States as
well as in a number of foreign countries, including Mexico, Canada, and Argentina. CSI
Compressco is managed by CSI Compressco GP Inc., which is
an indirect, wholly owned subsidiary of TETRA Technologies,
Inc.(NYSE: TTI).
About Hudson Bay Capital
Launched in 2005 by Chief Investment Officer Sander Gerber, Hudson Bay Capital is an
SEC-registered investment manager that seeks to achieve
persistently positive returns while maintaining a focus on risk
management and capital preservation. The firm is based in
New York and invests capital
across global markets on behalf of its largely institutional
clientele.
Forward Looking Statements
This press release contains "forward-looking statements" and
information based on our beliefs and those of our general partner,
CSI Compressco GP Inc. Forward-looking statements in this press
release are identifiable by the use of the following words and
other similar words: "anticipates", "assumes", "believes",
"budgets", "could", "estimates", "expects", "forecasts", "goal",
"intends", "may", "might", "plans", "predicts", "projects",
"schedules", "seeks", "should", "targets", "will" and "would".
These forward-looking statements include statements, other than
statements of historical fact, concerning CSI Compressco's
strategy, future operations, financial position, estimated
revenues, negotiations with our bank lenders, projected costs and
other statements regarding CSI Compressco's beliefs, expectations,
plans, prospects, and other future events and performance. Such
forward looking statements reflect our current views with respect
to future events and financial performance and are based on
assumptions that we believe to be reasonable but such
forward-looking statements are subject to numerous risks and
uncertainties, including, but not limited to: economic and
operating conditions that are outside of our control, including the
supply, demand, and prices of crude oil and natural gas; the levels
of competition we encounter; the activity levels of our customers;
the availability of adequate sources of capital to us; our ability
to comply with contractual obligations, including those under our
financing arrangements; our operational performance; the loss of
our management; risks related to acquisitions and our growth
strategy, including our 2014 acquisition of Compressor Systems,
Inc.; the availability of raw materials and labor at reasonable
prices; risks related to our foreign operations; the effect and
results of litigation, regulatory matters, settlements, audits,
assessments, and contingencies; risks associated with a material
weakness in our internal control over financial reporting and the
consequences we may encounter if we are unable to remediate that
material weakness or if we identify other material weaknesses in
the future; information technology risks, including the risk of
cyberattack; and other risks and uncertainties contained in our
Annual Report on Form 10-K and our other filings with the U.S.
Securities and Exchange Commission ("SEC"), which are available
free of charge on the SEC website at www.sec.gov. The risks and
uncertainties referred to above are generally beyond our ability to
control and we cannot predict all the risks and uncertainties that
could cause our actual results to differ from those indicated by
the forward-looking statements. If any of these risks or
uncertainties materialize, or if any of the underlying assumptions
prove incorrect, actual results may vary from those indicated by
the forward-looking statements, and such variances may be material.
All subsequent written and oral forward-looking statements made by
or attributable to us or to persons acting on our behalf are
expressly qualified in their entirety by reference to these risks
and uncertainties. You should not place undue reliance on
forward-looking statements. Each forward-looking statement speaks
only as of the date of the particular statement, and we undertake
no obligation to update or revise any forward-looking statements we
may make, except as may be required by law.
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SOURCE CSI Compressco LP