Wells Fargo amended Blueknight Energy Partners‘ credit facility, reducing the total commitment from $450 million to $400 million, to support the company’s sale of three asphalt terminals to Ergon Asphalt & Emulsions.
According to a related 8-K filing, the amendment, among other things:
- Permits Blueknight to make up to a $55 million investment to acquire an indirect equity interest in Cimarron Express Pipeline, the joint venture between affiliates of Ergon and affiliates of Alta Mesa Resources which plans to construct a new crude oil pipeline from northeastern Kingfisher County, OK to the Blueknight’s Cushing, OK crude oil terminal
- Modifies the calculation of consolidated EBITDA to, among other things, include distributions from the Cimarron Express JV from and after making the above-described investment
- Limits quarterly distributions to $10.7 million through and including the fiscal quarter ending December 31, 2019
- Provides financial covenant relief, subject to the terms and conditions of the amendment
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The asphalt terminals are located in Lubbock and Saginaw, TX and Memphis, TN and will be sold for $90 million in cash. Net proceeds from the sale will be used to reduce outstanding indebtedness under Blueknight’s credit facility. The transaction is expected to close upon the expiration or earlier termination of the HSR waiting period, subject to customary conditions and regulatory approval.
Blueknight owns and operates a diversified portfolio of complementary midstream energy assets and provides integrated terminalling, gathering and transportation services for companies engaged in the production, distribution and marketing of liquid asphalt and crude oil.
