Calumet Specialty Products Partners, L.P. Announces Planned Sale-Leaseback Transaction for Shreveport Fuels Terminal Assets
Calumet Specialty Products Partners, L.P. (NASDAQ: CLMT) announced a sale-leaseback agreement for its fuels terminal assets at the Shreveport refinery, valued at $70 million. The seven-year lease with Stonebriar Commercial Finance carries an implied interest rate of 8.4%. Proceeds will be used to redeem $70 million of the Company's 2022 Senior Notes. The transaction is subject to closing conditions and obtaining consent for indenture amendments, with a Consent Solicitation launched that expires on February 5, 2021. As of December 31, 2020, Calumet maintains strong liquidity of $263 million.
- Sale-leaseback transaction valued at $70 million enhances liquidity.
- Implied interest rate of 8.4% on the lease is relatively low.
- Proceeds will help redeem $70 million of the 2022 Senior Notes.
- Transaction subject to customary closing conditions and bondholder consent may delay execution.
- Dependence on bondholders' agreement poses a risk for the transaction.
INDIANAPOLIS, Feb. 1, 2021 /PRNewswire/ -- Calumet Specialty Products Partners, L.P. ("Calumet," the "Partnership" or the "Company") (NASDAQ: CLMT), a leading independent producer of specialty hydrocarbon and fuels products, announced today that it has reached an agreement in principle to enter into a sale-leaseback transaction of its fuels terminal assets at the Company's Shreveport refinery, which transaction is subject to customary closing conditions and the Partnership obtaining consent to amend the indentures governing its
Highlights of the Transaction:
- The Company has negotiated a sale-leaseback transaction with Stonebriar Commercial Finance for the fuels terminal assets at the Shreveport refinery for total gross consideration of
$70 million . All fuels and specialty production assets are outside the scope of this transaction. - The seven-year lease agreement carries an implied interest rate of approximately
8.4% , with cash proceeds expected to be deployed to redeem$70 million of the 2022 Notes. - The Company expects the process to conclude promptly following the completion of the Consent Solicitation from holders of a majority of the 2022 Notes and 2023 Notes.
- Calumet remains well capitalized with total pre-transaction liquidity of approximately
$263 million as of December 31, 2020, including approximately$109 million of cash.
Todd Borgmann, Senior Vice President & Chief Financial Officer, said, "This transaction will allow Calumet to create maximum debt management optionality at a low cost. Conservative management of our debt maturities enables us to pursue our strategic deleveraging options with a focus on maximizing long-term unitholder value with order and discipline."
About Calumet Specialty Products Partners, L.P.
Calumet Specialty Products Partners, L.P. (NASDAQ: CLMT) is a master limited partnership and a leading independent producer of high-quality, specialty hydrocarbon products in North America. Calumet processes crude oil and other feedstocks into customized lubricating oils, solvents and waxes used in consumer, industrial and automotive products; produces fuel products including gasoline, diesel and jet fuel. Calumet is based in Indianapolis, Indiana, and operates nine manufacturing facilities located in northwest Louisiana, northern Montana, western Pennsylvania, Texas and eastern Missouri.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements and information in this press release may constitute "forward-looking statements." The statements discussed in this press release that are not purely historical data are forward-looking statements, including, but not limited to, the statements regarding (i) the timing of the Consent Solicitation and the expected participation by certain holders of 2022 Notes and 2023 Notes, (ii) the sale-leaseback transaction and expected use of proceeds thereof (iii) the effect, impact, potential duration or other implications of the ongoing novel coronavirus pandemic and global crude oil production levels on our business and operations, (iv) our expectation regarding our business outlook and cash flows, (v) our expectation regarding anticipated capital expenditures and strategic initiatives, and (vi) our ability to meet our financial commitments, debt service obligations, contingencies and anticipated capital expenditures. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. Our forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions that could cause our actual results to differ materially from our historical experience and our present expectations. For additional information regarding known material risks, uncertainties and other factors that can affect future results, please see our filings with the SEC, including our latest Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.
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SOURCE Calumet Specialty Products Partners, L.P.
FAQ
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