July 08, 2019 [Oil & Gas] – Martin Midstream Partners L.P. announces the completion of the sale of its membership interests in Arcadia Gas Storage, LLC, Cadeville Gas Storage LLC, Monroe Gas Storage Company, LLC and Perryville Gas Storage LLC to Hartree Cardinal Gas, LLC, a subsidiary of Hartree Bulk Storage LLC.
The net proceeds after sales expenses of approximately $212.0 million have been used to reduce outstanding borrowings under the Partnership’s revolving credit facility.
Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC, the general partner of the Partnership said, “Beginning last year, the Partnership committed to strengthening its balance sheet through strategic initiatives aimed at reducing leverage. The first set of initiatives was executed in 2018 with the divestiture of our interest in West Texas LPG Pipeline Limited Partnership and the sale of a non-strategic terminal asset located in Nevada.
On January 1, 2019, we completed the next initiative with the acquisition of Martin Transport, Inc. from Martin Resource Management Corporation. Today we continue to advance our strategic initiatives with the announcement of the completion of the sale of our natural gas storage assets. Combined, these transactions have generated net cash proceeds of approximately $283.0 million, which was used to pay down debt, while only reducing the Partnership’s EBITDA by approximately $3.5 million.
This debt reduction translates, on a pro-forma basis, to an estimated leverage of 4.6 times and 4.0 times at year end 2019 and 2020, respectively. As a result of the sale of our natural gas storage assets, the Partnership will record a significant non-cash loss in the second quarter of 2019. However, the completion of these strategic initiatives has reduced leverage substantially and repositioned the Partnership to create value for our unitholders.”