NGL Energy Partners has signed a definitive agreement to sell TransMontaigne Product Services and associated assets to a strategic buyer for proceeds of $300 million.
The TransMontaigne Product Services (TPSL) makes up a portion of NGL's refined products reporting segment. The divested assets include a terminalling services agreement with TransMontaigne Partners, including the exclusive rights to utlise 18 terminals, line space along Colonial and Plantation Pipelines, two wholly-owned refined product terminals in Georgia and multiple third-party throughput agreements and all associated customer contracts, inventory and working capital.
Mike Krimbill, NGL's CEO, says: 'NGL continues to focus on its core areas where we have competitive strength. These focus areas generate stable and predictable cash flows as we grow our mix of long-term contracted revenues. The sale of TPSL is part of this strategy and a result of the strategic review of the refined products business announced earlier this year.
'Along with the significant reduction in inventory and working capital associated with this business, this transaction reduces borrowings on our working capital revolver and enhances the partnership's liquidity and overall leverage profile.
'Managing our leverage and cost of capital are fundamental to our business strategy as we continue our strategic growth plan while maintaining focus on a strong balance sheet.'
The transaction is expected to close during the second fiscal quarter.
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