Tulsa-based NGL Energy Partners LP announced on Wednesday several strategic actions along with updated guidance, according to a company press release.
The company disclosed a $200 million private placement of 10.75% Class A Convertible Preferred Units and formation of a strategic relationship with funds managed by Oaktree Capital Management L.P.
“I believe this is a very positive transaction for NGL and I look forward to having Oaktree as a partner and represented on our Board. The investment by Oaktree is a strong endorsement of our business model, strategy and future growth projects. We plan to jointly pursue certain attractive assets together that Oaktree will assist in financing/structuring and NGL will operate,” stated Mike Krimbill, CEO of NGL.
NGL also declared a temporary reduction in quarterly cash distribution to $0.39 per common unit ($1.56 per common unit annualized) which will generate an additional $170 million of coverage over the next year. The distribution will be payable on May 13, 2016 to common unitholders of record at the close of business on May 3, 2016.
The company also reported enhanced liquidity and senior note repurchases resulting in the ability to fund growth projects while also significantly reducing outstanding debt.
Further information will be made available at NGL’s analyst and investor call with management scheduled for 11am EDT on Friday, April 22, 2016.