VTTI has announced plans to buy out its general partner VTTI Energy Partners as a result of its shares trading below expectations.
It plans to acquire all publically held common units in exchange for $18.75 per common unit. The transaction is to be effected through a merger of the partnership with a wholly owned subsidiary of VTTI.
VTTI says that despite two drop down transactions and six distribution increases since mid-2015, VTTI Energy Partners’ common units have performed below VTTI’s expectations even amidst recent improvement in commodity prices and investor sentiment in the broader market.
It adds: ‘Given the trading levels of the Partnership’s common units, the resulting increased cost of capital and the liquidity challenges associated with the Partnership’s relatively small public float and other factors, VTTI does not intend to execute any further dropdowns to the partnership of additional assets or equity interests in VTTI, the holding company for the Partnership’s operating subsidiaries.’