Martin Midstream Partners has announced it has entered an agreement with NuStar Energy to sell its terminal assets in Corpus Christi, Texas.
Martin Midstream Partners L.P. (MMLP or the partnership) has announced that it has entered into a definitive agreement with NuStar Logistics, L.P. to sell some of its terminalling assets, located in Corpus Christi, Texas, for gross consideration of US$107 million plus the reimbursement of certain capital expenditures and prepaid items (the transaction). The partnership is selling its 900 000 bbl crude oil storage terminal commonly known as the Corpus Christi crude terminal, its refined product barge terminal, certain pipelines and related easements as well as dockage and trans-loading assets (collectively known as the assets). MMLP expects to receive net proceeds of approximately US$93 million after transaction fees and expenses, in addition to certain cash payments previously received by the partnership in conjunction with its mandated relocation of certain dockage assets.
The transaction is subject to customary closing conditions, including antitrust approval. The partnership expects to close the transaction prior to year-end 2016.
Concurrent with the announced disposition of the assets, the partnership also announced it has declared a quarterly cash distribution of US$0.50 per unit, or US$2 per unit on an annualised basis, for the quarter ended 30 September 2016. The quarterly distribution represents a reduction of approximately 38.5% from the distribution paid following the second quarter 2016 (2Q16). The distribution is payable on 14 November 2016 to common unitholders of record as of the close of business on 7 November 2016. The ex-dividend date for the cash distribution is 3 November 2016.
Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC said, "This sale of assets is a significant positive event for the partnership and a necessary first step to ultimately returning MMLP to a growth trajectory. While these assets have historically performed well for the partnership, they are not critical to its success moving forward. Given our focus on reduction of leverage, we feel this asset sale and distribution right-sizing are prudent moves for the partnership at this time. Together, these two actions should provide a sound catalyst to reducing our currently elevated cost of capital by de-levering and improving increased distribution coverage to our unitholders. Looking ahead, we anticipate that these efforts will improve the balance sheet and result in estimated distribution coverage of at least 1.20 times in 2017 and 2018."
Read the article online at: https://www.tanksterminals.com/storage-tanks/21102016/martin-midstream-partners-to-sell-terminal-assets/
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