Fort Worth, Texas
- January 5, 2018 - Emerge Energy Services LP (the
"Partnership" or "Emerge Energy") today announced that it has
entered into (i) a $75 million Second Amended and Restated
Revolving Credit and Security Agreement (which amends and restates
its existing revolving credit facility) among the Partnership, the
subsidiary borrowers, PNC Bank, National Association, as
administrative agent and the other lenders party thereto, (ii) a
new $215 million Second Lien Note Purchase Agreement (a portion of
the proceeds of which will be used to refinance in full its
existing second lien term loan), and (iii) a Common Unit Purchase
Agreement for the private placement of approximately $6.0 million
of its common units representing limited partner interests in the
Partnership. Houlihan Lokey Capital, Inc. served as lead placement
agent in connection with the financing.
"This refinancing marks an
important milestone for Emerge Energy as we start 2018 on a highly
positive note," commented Ted W. Beneski, Chairman of the Board of
Directors of the general partner of Emerge Energy. "The transaction
provides the necessary capital and flexibility to complete our
previously announced San Antonio expansion plans. We expect the
initial portion of the new plant will be operational in May, and
ultimately we expect the San Antonio operation to have a nameplate
capacity of approximately 4 million tons per year once we receive
the final environmental permits."
Rick Shearer, Chief Executive
Officer of the general partner of Emerge Energy, added, "Demand for
both northern and in-basin frac sand remains strong, and our
position as a leading frac sand producer will be bolstered with our
expanded in-basin operations. Recent customer contract discussions
regarding product from the San Antonio plant indicate that our
facility will be highly utilized from the onset, and continued
positive feedback from the marketplace validates our previously
made decision to upsize the plant to an expected 4 million tons per
year. Once the San Antonio operation achieves full scale, we expect
to have approximately 4.6 million tons per year of in-basin
capacity including our Kosse, Texas operation, or approximately 42%
of our expected 10.9 million tons per year of total production
capacity. Our full suite of in-basin, northern white, and
technology-driven sand allows us to serve the full range of frac
sand needs for the oil and gas industry."
Second Amended
and Restated Revolving Credit Facility
On January 5, 2018, the
Partnership entered into a second amended and restated $75.0
million revolving credit agreement with the Partnership's wholly
owned subsidiaries Emerge Energy Services Operating LLC and
Superior Silica Sands LLC, as borrowers (the "Borrowers") and PNC
Bank, National Association as administrative agent and collateral
agent (the "Revolving Credit Agreement"), which replaces the
Partnership's existing $170.0 million senior secured revolving
credit facility entered into as of June 27, 2014. The Revolving
Credit Agreement provides for a $75 million asset-based revolving
credit facility, and a $20 sublimit for the issuance of letters of
credit. The Revolving Credit Agreement matures on January 5, 2022.
Substantially all of the Partnership's assets are pledged as
collateral on a first lien basis. The credit facility will be
available to refinance existing indebtedness, fund fees and
expenses incurred in connection with the credit facility and for
general business purposes, including working capital requirements,
capital expenditures, permitted acquisitions, making debt payments
when due, and making distributions and dividends. The Revolving
Credit Agreement contains various covenants and restrictive
provisions and also requires the maintenance of certain financial
covenants, including a maximum total leverage ratio, a minimum
fixed charge coverage ratio, and minimum liquidity.
Second Lien Note
Purchase Agreement
On January 5, 2018, the
Partnership entered into a new $215.0 million second lien note
purchase agreement with the Partnership's wholly owned subsidiaries
Emerge Energy Services Operating LLC and Superior Silica Sands LLC,
as issuers (the "Issuers") and HPS Investment Partners, LLC as
notes agent and collateral agent (the "Second Lien Note Purchase
Agreement"). The Second Lien Note Purchase Agreement matures on
January 5, 2023. Proceeds of the sale of the notes under the Second
Lien Note Purchase Agreement will be used to (i) fully pay off the
Partnership's existing second lien term credit facility, (ii) fully
pay off the obligations under the Partnership's existing revolving
credit facility, (iii) finance certain capital expenditures, (iv)
pay fees and expenses incurred in connection with the new second
lien facility and (v) for general business purposes. Substantially
all of the Partnership's assets are pledged as collateral on a
second lien basis. The Second Lien Note Purchase Agreement contains
various covenants and restrictive provisions and also requires the
maintenance of certain financial covenants, including a maximum
total leverage ratio, a minimum fixed charge coverage ratio, and
minimum liquidity.
Common Unit
Private Placement
On January 5, 2018, the
Partnership entered into an agreement with certain affiliates of
the lenders under the Second Lien Note Purchase Agreement to sell
approximately $6.0 million of its common units representing limited
partner interests in the Partnership in a private placement. The
Partnership expects to use the net proceeds from the offering for
general partnership purposes. As part of the transaction, the
Partnership and the purchaser entered into a registration rights
agreement which provides the purchasers with customary registration
rights. The private placement simultaneously closed on January 5,
2018.
The securities offered in the
private placement have not been registered under the Securities Act
of 1933, as amended (the "Securities Act"), or any state securities
laws and may not be offered or sold in the United States absent
registration or an applicable exemption from registration
requirements of the Securities Act and applicable state laws.
This press release shall not
constitute an offer to sell or a solicitation of an offer to buy
the securities described herein, and shall not constitute an offer,
solicitation or sale in any state or jurisdiction in which such an
offer, solicitation or sale would be unlawful.
About Emerge Energy Services LP
Emerge Energy Services LP (NYSE:
EMES) is a growth-oriented limited partnership engaged in the
business of mining, producing, and distributing silica sand, a key
input for the hydraulic fracturing of oil and natural gas wells,
through its subsidiary Superior Silica Sands LLC.
Forward-Looking
Statements
This release contains certain
statements that are "forward-looking statements." These
statements can be identified by the use of forward-looking
terminology including "may," "believe," "will," "expect,"
"anticipate," or "estimate." These forward-looking statements
involve risks and uncertainties, and there can be no assurance that
actual results will not differ materially from those expected by
management of the Partnership. When considering these
forward-looking statements, you should keep in mind the risk
factors and other cautionary statements in the Partnership's Annual
Report on Form 10-K filed with the SEC. The risk factors and
other factors noted in the Annual Report could cause actual results
to differ materially from those contained in any forward-looking
statement. Except as required by law, the Partnership does
not undertake any obligation to update or revise such
forward-looking statements to reflect events or circumstances that
occur after the date hereof.
PRESS CONTACT
Investor Relations
(817) 618-4020
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Emerge Energy Services LP via Globenewswire
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