Westlake Announces Increase in Target Distribution Thresholds for Incentive Distribution Rights (IDRs) of Westlake Chemical P...
July 30 2018 - 6:30AM
Business Wire
Westlake Chemical Corporation (“Westlake”) (NYSE: WLK) and
Westlake Chemical Partners LP (the “Partnership”) (NYSE: WLKP)
today announced that the board of directors of Westlake Chemical
Partners GP LLC, the general partner of the Partnership, and
Westlake approved an amendment (the “Amendment”) to the
Partnership’s partnership agreement, pursuant to which the target
distribution thresholds above which the Partnership’s incentive
distribution rights (IDRs) held by Westlake are entitled to receive
the corresponding portion of distributions paid by the Partnership,
have been increased as follows:
Quarterly Distributionper Unit Unitholders
IncentiveDistributionRights
First Target Distribution $1.2938 100% 0%
Second Target Distribution $1.4063 85% 15%
Third Target Distribution $1.6875 75% 25%
Thereafter > $1.6875 50% 50%
The Amendment was adopted in an effort to further strengthen the
underlying value of the Partnership, improve its cost of capital,
and enhance its long-term distribution growth prospects. The
Amendment is immediately accretive to the Partnership’s cash flow
per unit and coverage.
With or without IDRs, we expect over time Westlake will continue
to receive the same cash flows from Westlake Chemical OpCo LP and
the Partnership. The Amendment supports accretive drop-down
transactions from Westlake to the Partnership and supports
Westlake’s MLP strategy by continuing to keep the Partnership’s
cost of capital competitive.
“We are pleased to announce Westlake’s ongoing support of the
Partnership through the adoption of the Amendment. By resetting the
IDR distribution tiers, Westlake is relieving the Partnership of
the IDR cash flows for an extended period which improves the
Partnership’s cost of capital and supports its ability to continue
to make distributions in-line with its historical growth rates,”
said Westlake’s President and Chief Executive Officer Albert Chao.
“Whereas to Westlake, the reset enhances the Partnership as a
source of advantaged equity capital to grow Westlake’s business,
thus the reset of the IDR distribution tiers directly benefits both
the Partnership and Westlake.”
The Amendment became effective on July 27, 2018, and will apply
to all distributions starting with any distribution with respect to
the second quarter of 2018.
The statements in this release and the related teleconference
relating to matters that are not historical facts, such as
distribution growth, our ability to complete drop-down and other
acquisitions or accretive investments and the potential benefits to
Westlake and the Partnership, are forward-looking statements. These
forward-looking statements are subject to significant risks and
uncertainties. Actual results could differ materially, based on
factors including, but not limited to, operating difficulties; the
volume of ethylene that we are able to sell; the price at which we
are able to sell ethylene; changes in the price and availability of
feedstocks; changes in prevailing economic conditions; actions of
Westlake Chemical Corporation; actions of third parties; inclement
or hazardous weather conditions, including flooding, and the
physical impacts of climate change; environmental hazards; changes
in laws and regulations (or the interpretation thereof); inability
to acquire or maintain necessary permits; inability to obtain
necessary production equipment or replacement parts; technical
difficulties or failures; labor disputes; difficulty collecting
receivables; inability of our customers to take delivery; fires,
explosions or other industrial accidents; our ability to borrow
funds and access capital markets; and other risk factors. For more
detailed information about the factors that could cause actual
results to differ materially, please refer to the Partnership's
Annual Report on Form 10-K for the year ended December 31, 2017,
which was filed with the Securities and Exchange Commission in
March 2018.
Conference Call
Westlake and the Partnership will host a conference call at 1:00
p.m. Eastern Time (12:00 p.m. Central Time) on Monday, July 30,
2018, to discuss the Amendment. Presentation slides will also be
available on Westlake’s and the Partnership’s websites.
To access the conference call, dial (855) 760-8160, or (704)
288-0624 for international callers, approximately 10 minutes prior
to the scheduled start time and reference passcode 6068415.
The conference call will also be available via webcast
at https://edge.media-server.com/m6/p/7fe2uibu and
the press release and presentation slides can be obtained via
Westlake’s website
at https://www.westlake.com/investor-relations and the
Partnership’s website at
http://investors.wlkpartners.com/CorporateProfile.
This call will be available for replay beginning at 3:00 p.m.
Eastern Time and may be accessed until 11:59 p.m. Eastern Time on
August 6, 2018. The replay can be accessed by calling the following
numbers: domestic callers should dial (855) 859-2056 and
international callers may access the replay at (404) 537-3406. The
access code at both numbers is 6068415.
About Westlake Chemical Corporation
Westlake Chemical Corporation is an international manufacturer
and supplier of petrochemicals, polymers and building products with
headquarters in Houston. The company's range of products includes:
ethylene, polyethylene, styrene, propylene, chlor-alkali and
derivative products, PVC suspension and specialty resins, PVC
compounds, and PVC building products including siding, pipe,
fittings and specialty components, windows, fence, deck and film.
For more information, visit the company's Web site at
www.westlake.com.
About Westlake Chemical Partners
Westlake Chemical Partners is a limited partnership formed by
Westlake Chemical Corporation to operate, acquire and develop
facilities for the processing of natural gas liquids as well as
other qualifying activities. Headquartered in Houston, the
Partnership owns a 18.3% interest in Westlake Chemical OpCo LP.
Westlake Chemical OpCo LP’s assets include three facilities in
Calvert City, Kentucky, and Lake Charles, Louisiana which process
ethane and propane into ethylene, and an ethylene pipeline. For
more information about Westlake Chemical Partners LP, please
visit http://www.wlkpartners.com/.
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Westlake Chemical Partners LPInvestorsSteve Bender,
713-585-2900orMediaL. Benjamin Ederington, 713-585-2900
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