An email has been sent to your address with instructions for changing your password.
There is no user registered with this email.
Sign Up
To create a free account, please fill out the form below.
Thank you for signing up!
A confirmation email has been sent to your email address. Please check your email and follow the instructions in the message to complete the registration process. If you do not receive the email, please check your spam folder or contact us for assistance.
Welcome to our platform!
Oops!
Something went wrong while trying to create your new account. Please try again and if the problem persist, Email Us to receive support.
Genesis Energy, L.P. Sells 36% Minority Equity Interest in its Cameron Highway Oil Pipeline System
Rhea-AI Impact
(Neutral)
Rhea-AI Sentiment
(Neutral)
Tags
Rhea-AI Summary
Genesis Energy, L.P. (NYSE: GEL) has closed the sale of a 36% minority equity interest in its Cameron Highway Oil Pipeline System (CHOPS) for an 8/8ths valuation of $1.16 billion, generating approximately $418 million in gross proceeds. The company will use proceeds to fully repay a $300 million term loan and reduce outstanding amounts under its credit facility, resulting in a pro forma bank leverage ratio of 4.96x. Genesis will fund its Granger expansion project through free cash flow and available credit, while retaining operational control of CHOPS.
Positive
Generated approximately $418 million in gross proceeds from the sale.
Reduced bank leverage ratio to 4.96x, enhancing financial flexibility.
Retained operational control of CHOPS with a 64% ownership stake.
Negative
None.
HOUSTON--(BUSINESS WIRE)--
Genesis Energy, L.P. (NYSE: GEL) announced today the closing of the sale of a 36% minority equity interest in its Cameron Highway Oil Pipeline System (“CHOPS”) to an undisclosed financial party at an 8/8ths valuation of $1.16 billion, which results in gross proceeds to Genesis of approximately $418 million. Proceeds from the sale, net of fees and expenses, will be used to repay the full $300 million outstanding under its term loan with the remainder going to pay down outstanding amounts under the revolving portion of its senior secured credit facility and results in a pro forma bank leverage ratio of 4.96x1. Genesis now owns 64% of CHOPS and will remain operator of the pipeline.
In conjunction with this announcement, Genesis has made the decision to fund the remaining capital required for its Granger expansion project over and above the minimum of $250 million Genesis is required to draw from its asset level preferred security. Genesis intends to fund the remaining capital through a combination of its internally generated free cash flow and availability under its senior secured credit facility.
Grant Sims, CEO of Genesis Energy, said, “This transaction confirms the significant value and longevity of our midstream assets focused on moving the low-carbon footprint crude oil produced in the deepwater areas of the central Gulf of Mexico, and importantly knocks off over a full half turn from our bank leverage ratio calculated on a pro forma basis. The transaction also provides Genesis with significant financial flexibility to use our increasing levels of free cash flow to continue to reduce debt and/or pursue the highest return projects in our portfolio. As we look forward, we remain very encouraged with the trajectory of our market-leading and diversified businesses.”
Citi served as financial advisor and Akin Gump Strauss Hauer & Feld LLP served as legal advisor to Genesis.
Genesis Energy, L.P. is a diversified midstream energy master limited partnership headquartered in Houston, Texas. Genesis’ operations include offshore pipeline transportation, sodium minerals and sulfur services, marine transportation and onshore facilities and transportation. Genesis’ operations are primarily located in the Gulf Coast region of the United States, Wyoming and the Gulf of Mexico.
