In the news release, TETRA Technologies, Inc. Announces Plans To
Deconsolidate CSI Compressco LP, issued 04-Jan-2021 by TETRA Technologies, Inc. over PR
Newswire, we are advised by the company that the third paragraph,
fifth sentence, should read "and net debt of $148 million" rather than "and net debt of
$158 million" as originally issued
inadvertently. The complete, corrected release follows:
TETRA Technologies, Inc. Announces Plans To Deconsolidate CSI
Compressco LP
THE WOODLANDS, Texas,
Jan. 4, 2021 /PRNewswire/ -- TETRA Technologies, Inc.
("TETRA" or the "Company") (NYSE: TTI) today announced that as part
of its ongoing strategic review, the Company is actively pursuing
several options to deconsolidate CSI Compressco LP ("CSI
Compressco") (NASDAQ: CCLP) from TETRA's financial statements. One
option to achieve this result would involve an exchange of TETRA's
general partner interest and incentive distribution rights for
additional CSI Compressco common units, along with other related
changes (the "GP Exchange"). A GP Exchange would streamline
CSI Compressco's structure consistent with multiple peer MLP
simplifications completed in the sector in recent years. The
Company is also simultaneously evaluating other potential strategic
transactions that would also result in a deconsolidation of CSI
Compressco from TETRA's financial statements. While TETRA,
CSI Compressco's Board of Directors and CSI Compressco's Conflicts
Committee have established a framework for the GP Exchange with
agreement on the primary financial terms, a definitive agreement
has not yet been finalized nor has the Conflicts Committee provided
its special approval.
TETRA's board believes the deconsolidation of CSI Compressco's
operating results, and indebtedness, from TETRA's financial results
would greatly simplify TETRA's financial reporting and has the
potential to unlock significant value for TETRA's
shareholders. However, no deconsolidation transaction has
been finalized and any such transaction remains subject to
completion of a definitive agreement, approval of TETRA's Board of
Directors, approval of CSI Compressco's Board of Directors and
Conflicts Committee (if applicable) and approval of each of TETRA's
and CSI Compressco's asset-based loan ("ABL") facility
lenders.
Brady Murphy, TETRA's Chief
Executive Officer, commented, "TETRA and CSI Compressco have each
individually performed well under very difficult market conditions
in the downturns of 2015-2017 and 2020. However, the
consolidated debt of CSI Compressco, which is non-recourse to
TETRA, has represented an overhang on TETRA's valuation and market
perception. We believe that eliminating the debt of CSI
Compressco from TETRA's balance sheet will better reflect TETRA's
strong performance and financial position. The Company
remained adjusted EBITDA positive and free cash flow positive, even
when excluding the benefit of working capital being monetized, in a
very challenging environment through the first three quarters of
2020 that have been reported. At the end of September 2020, TETRA had cash on hand of
$58.5 million and net debt of
$148
million. TETRA had nothing drawn on its ABL and its
term loan does not mature until 2025."
Company Overview
TETRA Technologies, Inc. is a geographically diversified oil and
gas services company, focused on completion fluids and associated
products and services, water management, frac flowback, production
well testing, and compression services and
equipment. TETRA owns an equity interest, including all
of the general partner interest, in CSI Compressco LP
(NASDAQ:CCLP), a master limited partnership.
Forward Looking Statements
This news 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 news
release are identifiable by the use of the following words and
other similar words: "anticipates," "assumes," "believes,"
"budgets," "could," "estimates," "expectations," "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, including the
potential exchange of general partner interests for additional
common units, the consummation of other strategic transactions
including dispositions and other statements regarding CSI
Compressco's beliefs, expectations, plans, prospects and other
future events, performance, and other statements that are not
purely historical. 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 condition that are outside of our control,
including; risks related to acquisitions, dispositions and our
growth strategy; 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 verbal
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 TETRA Technologies, Inc.