NuStar Energy L.P. (NYSE: NS) (the “Partnership”) announced
today that it has entered into an agreement to sell approximately
$590 million of newly issued Series D Cumulative Convertible
Preferred Units representing limited partner interests in the
Partnership (the “Preferred Units”) in a private placement to
investment funds managed or sub-advised by EIG Management Company,
LLC and FS/EIG Advisor, LLC, the advisor to FS Energy & Power
Fund (“EIG”). In addition, the Partnership has entered into an
agreement to sell approximately $10 million of Common Units to
William E. Greehey, Chairman of the Board of Directors (the
“Board”) of NuStar GP, LLC, the general partner of the
Partnership’s general partner. Neither the sale of the Common Units
nor the sale of the Preferred Units is conditioned upon the other.
The Partnership expects to use the aggregate net proceeds from the
sale of the Preferred Units and the Common Units for general
partnership purposes, including the repayment of debt and the
funding of growth capital expenditures.
Preferred Unit Offering to EIG
The purchasers will acquire 23,246,650 Preferred Units at a
price of $25.38 per Preferred Unit. At the initial closing,
scheduled to occur on June 29, 2018, the purchasers will purchase
$400 million of Preferred Units. The purchasers have agreed to
purchase the balance of the Preferred Units at a second closing,
scheduled to occur on July 13, 2018. Each closing of the sale of
the Preferred Units is subject to the satisfaction of customary
closing conditions.
The terms of the Preferred Units include:
- Distributions of 9.75% per annum for
the first two years, 10.75% per annum for years three through five,
and the greater of 13.75% per annum or the common unit distribution
rate thereafter.
- The Preferred Units are convertible
into common units representing limited partner interests in the
Partnership (the “Common Units”) on a one-for-one basis at the
purchasers’ option after two years.
- The Preferred Units are redeemable by
the Partnership after five years, and the purchasers can cause the
Partnership to redeem the Preferred Units after 10 years.
- The Preferred Units will rank pari
passu with the Partnership’s outstanding Series A, Series B and
Series C Preferred Units and senior to the Partnership’s Common
Units, with respect to distribution rights and upon
liquidation.
Common Unit Offering to Mr. Greehey
Mr. Greehey will acquire 413,736 Common Units at a price of
$24.17 per Common Unit. The Nominating/Governance & Conflicts
Committee of the Board approved the issuance and sale of the Common
Units to Mr. Greehey, and the closing of the sale of the Common
Units is scheduled to occur on June 29, 2018, subject to the
satisfaction of customary closing conditions.
“Earlier this year, we launched a step-by-step, comprehensive
plan to position NuStar for long-term financial strength and
sustainable future growth, and this financing is a key component of
that plan,” said Brad Barron, President and Chief Executive Officer
of the Partnership. “We are especially gratified by the fact that
our Chairman, Bill Greehey, has decided to participate in our
financing with his purchase of NuStar common units, further
demonstrating his confidence in, and continued support of, our
plan.
“The capital we will raise with this financing, together with
the proceeds from our planned sale of approximately $200-400
million of non-core assets, will allow us to accomplish several
important objectives, including:
- Reducing NuStar’s debt and lowering our
leverage;
- Strengthening NuStar’s balance sheet
and liquidity; and
- Funding NuStar’s 2018 and 2019 capital
programs.
“This financing represents a significant milestone in the
successful execution of our plan for 2018, which we believe will
allow NuStar to successfully de-lever and deliver strong,
sustainable distribution coverage. In addition, the financing,
combined with asset sales, should satisfy our expected equity needs
through 2020, which means we would not anticipate accessing the
public equity capital markets until 2021,” Barron said.
The securities offered in the private placements 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 the registration requirements of the
Securities Act and applicable state laws.
This press release is neither an offer to sell nor a
solicitation of an offer to purchase the securities described
herein.
About NuStar Energy L.P. and NuStar GP
Holdings, LLC (NYSE: NSH)
The Partnership is a publicly traded master limited partnership
based in San Antonio.
NSH is a publicly traded limited liability company that owns the
general partner interest, an approximate 11 percent common limited
partner interest and the incentive distribution rights in the
Partnership.
Important Information for Investors and
Unitholders
On February 7, 2018, the Partnership, Riverwalk Logistics, L.P.,
NuStar GP, LLC, Marshall Merger Sub LLC, a wholly owned subsidiary
of the Partnership (“Merger Sub”), Riverwalk Holdings, LLC and NSH
entered into an Agreement and Plan of Merger pursuant to which
Merger Sub will merge with and into NSH with NSH being the
surviving entity, such that the Partnership will be the sole member
of NSH following the merger. In connection with the proposed
merger, the Partnership has filed a registration statement
(Registration No. 333-223671), which includes its preliminary
prospectus, a preliminary proxy statement of NSH and other
materials, with the Securities and Exchange Commission (the “SEC”).
The registration statement was declared effective by the SEC on
June 15, 2018. INVESTORS AND UNITHOLDERS ARE URGED TO READ THE
REGISTRATION STATEMENT AND THE DEFINITIVE PROXY
STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS THAT HAVE BEEN OR
WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN
THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PARTNERSHIP, NSH AND THE PROPOSED
TRANSACTION. The information in this communication is for
informational purposes only and is neither an offer to purchase,
nor an offer to sell, subscribe for or buy any securities or the
solicitation of any vote or approval in any jurisdiction pursuant
to or in connection with the proposed transactions or otherwise,
nor shall there be any sale, issuance or transfer of securities in
any jurisdiction in contravention of applicable law. No offer of
securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act of 1933, as
amended, and otherwise in accordance with applicable law. A
definitive proxy statement/prospectus will be sent to unitholders
of NSH seeking their approval of the proposed merger. Investors and
unitholders may obtain a free copy of the proxy
statement/prospectus and other documents (when available)
containing important information about the Partnership and NSH
through the website maintained by the SEC at http://www.sec.gov.
Copies of the documents filed with the SEC by the Partnership will
be available free of charge on the Partnership’s website at
www.nustarenergy.com under the tab “Investors” or by contacting the
Partnership’s Investor Relations at
investorrelations@nustarenergy.com. Copies of the documents filed
with the SEC by NSH will be available free of charge on NSH’s
website at www.nustargpholdings.com under the tab “Investors” or by
contacting NSH’s investor relations at
investorrelations@nustarenergy.com.
The Partnership and its general partner, the directors and
certain of the executive officers of NuStar GP, LLC and NSH and its
directors and certain of its executive officers may be deemed to be
participants in the solicitation of proxies from the unitholders of
NSH in connection with the proposed merger. Information about the
directors and executive officers of NuStar GP, LLC is set forth in
the Partnership’s Annual Report on Form 10-K for the year ended
December 31, 2017 and subsequent statements of changes in
beneficial ownership on file with the SEC. Information about the
directors and executive officers of NSH is set forth in NSH’s
Annual Report on Form 10-K for the year ended December 31, 2017 and
subsequent statements of changes in beneficial ownership on file
with the SEC. These documents can be obtained free of charge from
the sources listed above. Other information regarding the
participants in the proxy solicitation and a description of their
direct and indirect interests, by security holdings or otherwise,
will be contained in the proxy statement/prospectus and other
relevant materials filed or to be filed with the SEC.
Forward-Looking
Statements
This press release includes “forward-looking statements” as
defined by the SEC. All statements, other than statements of
historical fact, included herein that address activities, events or
developments that the Partnership or NSH expects, believes or
anticipates will or may occur in the future, including the expected
closings of the sale of the Preferred Units and Common Units, the
expected use of the net proceeds from the sale of the Preferred
Units and Common Units, and anticipated benefits and other aspects
of the proposed merger, are forward-looking statements. These
forward-looking statements are subject to risks and uncertainties
that may cause actual results to differ materially, including the
possibility that the merger will not be completed prior to the
August 8, 2018 outside termination date, required approvals by
unitholders and regulatory agencies, the possibility that the
anticipated benefits from the proposed mergers cannot be fully
realized, the possibility that costs or difficulties related to
integration of the two companies will be greater than expected, the
impact of competition and other risk factors included in the
reports filed with the SEC by the Partnership or NSH. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of their dates. Except as required
by law, neither the Partnership nor NSH intends to update or revise
its forward-looking statements, whether as a result of new
information, future events or otherwise.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180626006655/en/
NuStar Energy, L.P., San AntonioInvestors, Chris Russell,
Treasurer and Vice President Investor RelationsInvestor Relations:
210-918-3507orMedia, Mary Rose Brown, Executive Vice President and
Chief Administrative Officer,Corporate Communications:
210-918-2314website: http://www.nustarenergy.com
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