SAN ANTONIO--(BUSINESS WIRE)--Jun. 26, 2018--
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:
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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.
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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.
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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.
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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:
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Reducing NuStar’s debt and lowering our leverage;
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Strengthening NuStar’s balance sheet and liquidity; and
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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/
Source: NuStar Energy L.P.
NuStar Energy, L.P., San Antonio
Investors, Chris Russell,
Treasurer and Vice President Investor Relations
Investor Relations:
210-918-3507
or
Media, Mary Rose Brown, Executive Vice
President and Chief Administrative Officer,
Corporate
Communications: 210-918-2314
website: http://www.nustarenergy.com