American Midstream Closes Sale of Marine Products Terminals, Receives Liquidity Upgrade from Moody's and Provides Update on Previously Announced Transactions
HOUSTON, Aug. 1, 2018 /PRNewswire/ -- American Midstream Partners, LP (NYSE: AMID) ("AMID" or "Partnership") today announced the closing of 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 approximately $210 million in cash.
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. The Partnership anticipates releasing its second quarter 2018 results on August 9, 2018 and will provide additional earnings call details prior to the release.
About American Midstream Partners, LP
American Midstream Partners, LP is a growth-oriented limited partnership formed to provide critical midstream infrastructure that links producers of natural gas, crude oil, NGLs and condensate to end-use markets. American Midstream's assets are strategically located in some of the most prolific offshore and onshore basins in the Permian, Eagle Ford, East Texas, Bakken and Gulf Coast. American Midstream owns or has an ownership interest in approximately 5,100 miles of interstate and intrastate pipelines, as well as ownership in gas processing plants, fractionation facilities, an offshore semisubmersible floating production system with nameplate processing capacity of 90 MBbl/d of crude oil and 220 MMcf/d of natural gas; and terminal sites with approximately 4.3 MMBbls of storage capacity.
For more information about American Midstream Partners, LP, visit: www.americanmidstream.com. The content of our website is not part of this release.
Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. We have used the words "could," "expect," "intend," "may," "strive," "will," "would," and similar terms and phrases to identify forward-looking statements in this press release. Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. Many of the factors that will determine these results are beyond our ability to control or predict. These factors include the risk factors described in Part I, Item 1A. in our Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on April 9, 2018, and our other filings with the SEC. All future written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the previous statements. The forward-looking statements herein speak as of the date of this press release. We undertake no obligation to update such statements for any reason, except as required by law.
Investor Contact
American Midstream Partners, LP
Mark Schuck
Director of Investor Relations
(346) 241-3497
[email protected]
SOURCE American Midstream Partners, LP
Related Links
http://www.americanmidstream.com
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