USD Partners Announces Forbearance Agreement Under Credit Agreement
June 25 2024 - 4:38PM
Business Wire
USD Partners LP (OTC: USDP) (the “Partnership”) announced today
that on June 21, 2024 it entered into an agreement (the
“Forbearance Agreement”) with the lenders and administrative agent
under its existing Credit Agreement. Pursuant to the Forbearance
Agreement, subject to certain terms and conditions, the lenders
have agreed to forbear through and until November 1, 2024 (the
“Termination Date”), from exercising any rights or remedies arising
from certain events of default and certain prospective events of
default related to the Partnership’s failure to satisfy certain
milestones under the Credit Agreement and other loan documents.
In exchange for agreeing to enter into the Forbearance
Agreement, the lenders under the Credit Agreement will require the
Partnership to, among other things, complete the sale of the
Partnership’s Hardisty Rail Terminal on or before December 30,
2024. The Termination Date may be extended (i) to December 30,
2024, upon satisfaction of certain milestones in the sale process
and (ii) to January 31, 2025, in the discretion of the
administrative agent. The Forbearance Agreement also obligates the
Partnership to adhere to an operating budget approved by the
administrative agent and includes an obligation to repay borrowings
with any cash on hand in excess of an agreed maximum.
The Hardisty Rail Terminal is underpinned by a long term
take-or-pay contract to load DRU volumes with an investment grade
customer. The DRU, which is owned jointly by Gibson Energy Inc. and
US Development Group, LLC (“USDG”), the owner of the Partnership’s
general partner, is not a part of the sale.
About USD Partners LP
USD Partners LP is a fee-based master limited partnership formed
in 2014 by USDG to acquire, develop and operate midstream
infrastructure and complementary logistics solutions for crude oil,
biofuels and other energy-related products. The Partnership
generates substantially all of its operating cash flows from
multi-year, take-or-pay contracts with primarily investment grade
customers, including major integrated oil companies, refiners and
marketers. The Partnership’s current operations include railcar
loading, storage, and as well as other related logistics services.
In addition, the Partnership provides customers with leased
railcars and fleet services to facilitate the transportation of
liquid hydrocarbons by rail.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of U.S. federal securities laws, including statements
with respect to the impact of the Forbearance Agreement, future
events relating to our Credit Agreement, including the
Partnership’s ability to successfully market and complete the sale
of the Hardisty Rail Terminal, and the business prospects of the
Partnership and the DRU. Words and phrases such as “plans,” “will,”
“could” and similar expressions are used to identify such
forward-looking statements. However, the absence of these words
does not mean that a statement is not forward-looking.
Forward-looking statements relating to the Partnership are based on
management’s expectations, estimates and projections about the
Partnership, its interests and the energy industry in general on
the date this press release was issued. These statements are not
guarantees of future performance and involve certain risks,
uncertainties and assumptions that are difficult to predict.
Therefore, actual outcomes and results may differ materially from
what is expressed or forecast in such forward-looking statements.
Factors that could cause actual results or events to differ
materially from those described in the forward-looking statements
include those set forth under the heading “Risk Factors” in the
Partnership’s financial statements for the year ended December 31,
2023, which are available on the Partnership’s website, and actions
by lenders, the Partnership’s ability to successfully market and
complete the sale of the Hardisty Rail Terminal in compliance with
the Forbearance Agreement, the Partnership’s ability to obtain
further forbearance, waivers, amendments, an extension of the
maturity date of the Credit Agreement or the Partnership’s ability
to repay or refinance borrowings under the Credit Agreement, the
impact of the loss of cash flows from the Hardisty Rail Terminal if
sold, the tax impact of cancellation of indebtedness income on the
Partnership and its unitholders upon completion of such sale, and
the potential winding down of the Partnership’s operations and/or
dissolution of the Partnership following such sale. Investors are
advised to read such “Risk Factors,” together with all information
publicly disclosed by the Partnership subsequent thereto, before
making an investment decision. The Partnership is under no
obligation (and expressly disclaims any such obligation) to update
or alter its forward-looking statements, whether as a result of new
information, future events or otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20240624018828/en/
Investor Relations Contacts: Kyle Schornick, (832)
991-8575 Senior Vice President and Chief Financial Officer
Jennifer Waller, (832) 991-8383 Senior Director, Financial
Reporting and Investor Relations