Tulsa’s Cypress Energy Partners, L.P. says it’s closed a more than $43 million placement of convertible preferred units to an affiliate and used the proceeds to pay down debt.
The company said the $43.5 million placement allows it to extend the maturity of its credit facility three years from the closing date of the renewal. The amended $90 million revolving credit facility has a $20 million accordion feature exclusive of additional banks that might join the credit facility down the road.
The company said only that an affiliate of its sponsor made the investment in a private place of public equity or PIPE. The conflicts committee of the board of directors with help from financial and legal advisors negotiated and approved the final terms.
Cypress’ Chairman, President and Chief Executive Officer, Peter C. Boylan III, said the new agreement allowed the company to reduce its debt 43% from the balance at March 31, 2018.
” The PIPE investment was $43.5 million, rather than our original estimate of up to $50 million, as the result of cash received from the successful divestiture of a saltwater disposal facility. We continue to believe our organic growth combined with the interest expense savings associated with having less debt will allow us to resume an increase to our distribution rate sometime in 2019,” said Boylan.
