Blueknight Energy Partners LP (Blueknight) has announced that it has entered into multiple definitive agreements to sell its crude oil terminalling, pipeline, and trucking business segments for approximately US$162 million in total cash consideration, including estimated crude oil linefill and inventory. Net proceeds, after transaction costs, will be used initially to reduce borrowings outstanding under the partnership's revolving credit facility and for general partnership purposes.
“This announcement represents a significant milestone as we transition Blueknight away from traditional oil and gas operations into a pure-play, downstream terminalling business focused on infrastructure and transportation end markets,” said Andrew Woodward, Chief Executive Officer. “We are excited about the financial flexibility to both materially improve our balance sheet and pursue future investment opportunities predicated on risk-adjusted returns while maintaining our long-term financial targets.”
“Pro forma for the transactions, Blueknight's differentiated, asphalt terminalling business delivers an industry-leading, stable cash flow profile underpinned by long-term, take-or-pay contracts with a weighted average term of 6 years. Our leverage ratio is expected to be approximately 2 times initially, and our coverage ratio on all distributions is expected to be approximately 1.2 times or greater on an annual basis. We believe these transactions, coupled with our new and improved strategy, best position the partnership for long-term growth and success,” added Woodward.
Woodward concluded: “I would also like to express my deepest thanks to all the employees who have supported these operations over the years and during this time of transition. On behalf of the entire organisation, we sincerely appreciate all of your hard work and continued dedication.”
Read the article online at: https://www.tanksterminals.com/special-reports/05012021/blueknight-announces-us162-million-sale-of-crude-oil-business/