NGL Energy Partners LP Announces Closings of Retail Propane Sale and Sawtooth Joint Venture and Provides Update on Debt Reduction

Source Reuters
Company NGL Energy Partners LPDCC plc 
Tags Asset Deals, Deals, Refining & Marketing Activities
Date April 02, 2018

NGL Energy Partners LP (NYSE:NGL) (“Partnership”) today announced that it has closed the previously announced transaction to sell a portion of its Retail Propane business to DCC LPG for $200 million in cash, adjusted for working capital. NGL announced this transaction in November 2017, closed the transaction on March 30, 2018 and retained all profits from this business through March 31, 2018.

Additionally, the Partnership also closed the Sawtooth natural gas liquids and refined products joint venture with Magnum Liquids, LLC, a portfolio company of Haddington Ventures LLC, along with Magnum Development, LLC and other Haddington-sponsored investment entities (collectively “Magnum”) on March 30, 2018. Magnum acquired an approximately 28.5% interest in Sawtooth from NGL, in exchange for consideration consisting of a cash payment of approximately $37.6 million (excluding working capital) and the contribution of certain refined products rights and adjacent leasehold. Magnum will have options to acquire NGL’s remaining interest within the next three years for an additional $182.4 million.

NGL has utilized the $237.6 million in proceeds from these transactions to reduce indebtedness, including the repurchase of approximately $71.4 million in principal amount of its senior unsecured notes at various prices in the open market during the quarter ended March 31, 2018. The weighted average price paid in these open market transactions was approximately 99.7% of par value. The remaining proceeds were used to repay borrowings under the Partnership’s revolving credit facility.

The following table summarizes the Partnership’s outstanding debt balances as of March 31, 2018 for the revolving credit facility and the senior unsecured notes:

      Prepayments /
      As Adjusted 
        (in thousands) 
Revolving credit facility:                         
Expansion capital borrowings        125,000        (125,000         
Working capital borrowings        1,014,500        (45,000        969,500 
Senior Unsecured Notes:                         
5.125% Notes due 2019        360,781        (7,357        353,424 
6.875% Notes due 2021        367,048                  367,048 
7.500% Notes due 2023        656,589        (40,642        615,947 
6.125% Notes due 2025        412,507        (23,372        389,135 

Source: EvaluateEnergy® ©2018 EvaluateEnergy Ltd