CSI Compressco LP (CCLP) Enters $30M Conv. Preferred Private Placement

September 21, 2016 7:32 AM EDT

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CSI Compressco LP (Nasdaq: CCLP) announced that it has completed private placements of $30 million of Series A Convertible Preferred Units ("Preferred Units") as a follow on to the previously announced $50 million offering of such securities completed on August 8, 2016. These placements were completed at a cash purchase price of $11.43 per unit under the same terms and conditions as the prior placement.

The Partnership will receive proceeds of approximately $29 million, after expenses, from these follow on offerings and intends to use the proceeds to reduce outstanding indebtedness, including the repurchase of outstanding senior notes as market conditions permit. Evercore Group L.L.C. and RBC Capital Markets, LLC acted as the Partnership's financial advisors for these transactions.

"The $80 million of capital from the original and follow on offerings will allow us to strengthen our balance sheet as we manage through this extended downturn," CSI Compressco President, Timothy Knox said.

The Preferred Units will pay quarterly distributions in additional Preferred Units equal to an annual rate of 11.00% of the issue price, subject to adjustment. Beginning March 2017, a ratable portion of the Preferred Units will convert into common units monthly over a total of thirty months. The Partnership has the option to satisfy a portion of the monthly conversions with cash payments, subject to certain restrictions. In addition, the Preferred Units will be convertible into common units, generally on a one-for-one basis, subject to adjustment, at the holders' option after May 31, 2017.

The securities offered in the private placement have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or applicable state securities laws, and accordingly may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws. The Partnership is required to file a registration statement with the SEC for the resale of the common units underlying the Preferred Units by the purchasers within 90 days after the closing date. The Purchase Agreement includes representations, warranties, covenants and other terms typical of a transaction of this type. A full description of the offerings can be reviewed in documents attached to the Partnership's Current Reports on Form 8-K filed with the SEC on August 8, 2016 and on the date hereof. You may also obtain these documents for free when they are available by visiting the SEC's web site at www.sec.gov.

This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which the offer, solicitation or sale of these securities would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

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