American Midstream Partners (AMID) has completed its previously announced sale of its marine products terminalling business (the Marine Products Terminals) to institutional investors advised by J.P. Morgan Asset Management for about $210m in cash.
Image: American Midstream closes sale of its marine products terminalling business. Photo: courtesy of adamr/ FreeDigitalPhotos.net.
The divestiture of the Marine Products Terminals, including the Harvey and Westwego terminals located in the Port of New Orleans and the Brunswick terminal located in the Port of Brunswick in Georgia, is a continuation of the Partnership’s previously announced non-core asset divestiture program.
The successful completion of this transaction strengthens the Partnership’s balance sheet and supports its deleveraging plan, while demonstrating the Partnership’s ability to execute on its revised capital allocation strategy. The proceeds of this sale will initially go toward reducing indebtedness under the Partnership’s revolving credit facility, while meaningfully enhancing liquidity.
Bank of America Merrill Lynch acted as exclusive financial advisor and Sidley Austin LLP served as legal counsel to AMID for the Marine Products Terminals transaction.
Refined Products Terminals
The Partnership and DKGP Energy Terminals LLC, a joint venture between Delek Logistics Partners, LP and Green Plains Partners LP, terminated the previously announced agreement for the sale of the Partnership’s refined products terminalling business (the “Refined Products Terminals”).
The termination was due to extensive federal regulatory approval delays as a result of the highly strategic nature of these assets. The assets continue to perform well, with strong demand and high utilization rates. The Partnership will begin actively remarketing the Refined Products Terminals.
Southcross Transaction
The Partnership received notice, on July 29, 2018, of termination of the Agreement and Plan of Merger, dated October 31, 2017 from Southcross Energy Partners, L.P. and notice of termination of the Contribution Agreement, dated October 31, 2017 from Southcross Holdings LP.
While the Southcross combination provided compelling growth opportunities, the Partnership was unable to arrange a prudent financing plan to consummate the transaction. The Partnership has continually identified additional commercial opportunities and the termination of the combination allows the Partnership to focus on these attractive organic growth projects without the financial strain that the Southcross transaction would have created.
These identified opportunities are not relegated to a single segment and encompass all of the Partnership’s core areas, providing the opportunity to create greater scale and density as well as expanding market reach.
Absent a significant amount of new low-cost equity capital, the Southcross combination would have inherently stressed the Partnership’s liquidity, while significantly limiting the pursuit of additional growth opportunities and restricting the desired pace of debt reduction.
In recognition of those considerations, following Southcross’s notice of termination, Moody’s Investors Services confirmed the Partnership’s corporate family rating and upgraded its liquidity rating.
The closing of the Partnership’s Marine Products Terminals divestiture further strengthens the Partnership’s liquidity position.
The Partnership’s core business continues to perform strongly and is expected to continue generating meaningful cash flow. The Partnership is encouraged by continued growth across its asset base and the increase in producer activity in and around the Partnership’s core asset footprint provides additional opportunities for continued growth.
Source: Company Press Release