CorEnergy Infrastructure Trust, Inc. (NYSE:CORR) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01
Entry into a Material Definitive Agreement.
As previously announced, on December 21, 2018 and to the Purchase and Sale Agreement dated as of such date (the “Agreement”), a subsidiary of CorEnergy Infrastructure Trust, Inc. (the “Company”) closed on the sale of its Portland Terminal Facility and remaining interest in the Zenith Joliet Terminal Holdings (“Joliet”) to Zenith Energy Terminals Holdings LLC (“Zenith”), the Company’s tenant under the lease for the Portland Terminal Facility. Of the negotiated sale price of approximately $61 million, approximately $56 million was paid in cash at closing, with the balance of $5 million payable via a promissory note due January 7, 2019. The Company would be entitled to receive certain additional consideration, under a formula prescribed in the Agreement, in the event Zenith sells, or enters into a definitive agreement to sell, the Portland Terminal Facility to a third party for a price greater than $60 million within six months following December 21, 2018. The foregoing description of the transaction is qualified by reference to the full text of the executed Agreement, a copy of which is filed as Exhibit 10.10.1 to this report and incorporated herein by reference.
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Item 1.02 |
Termination of a Material Definitive Agreement. |
As described in Item 1.01 of this 8-K, on December 21, 2018, the Company sold its Portland Terminal Facility to the lessee of the facility, Zenith, which effectively terminated the Portland Lease Agreement (the “Lease”), dated January 14, 2014, between the Company and Zenith.
At the time of the sale, base rent under the lease was approximately $6.2 million annually, and would have been subject to a cumulative CPI adjustment in year five of the initial term, with annual CPI adjustments thereafter. The Company was also eligible for a variable rent component based on daily volume increases over base daily volumes defined in the lease. As previously announced, while Zenith had a purchase option under the lease, which became effective in February 2017 and could have been exercised with 90 days’ notice, as well as future termination options on the fifth and tenth anniversaries of the lease, following an asset and market review, the Company and Zenith entered the negotiated sale described in Item 1.01 of this report.
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Item 2.01 |
Completion of Acquisition or Disposition of Assets |
The information set forth in Item 1.01 of this report regarding the Company’s sale of assets to Zenith, its tenant at the Portland Terminal Facility, is incorporated herein by reference. The unaudited pro forma consolidated financial information included as Exhibit 99.1 to this report reflects this disposition of assets.
The Company expects to utilize the sale proceeds to invest in another asset in 2019 or to deleverage, in order to further strengthen its capital structure.
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Item 9.01 |
Financial Statements and Exhibits |
b) Pro forma financial information for the Company related to the transaction referenced in Item 2.01 above is attached as Exhibit 99.1 and incorporated by reference herein.
The followingpro formafinancial information is included in Exhibit 99.1: an unauditedpro forma Consolidated Balance Sheet as of September 30, 2018, the unauditedpro formaConsolidated Statements of Income for the nine months ended September 30, 2018 and the year ended December 31, 2017 and the accompanying notes. The pro forma financial statements give effect to the sale as if it had occurred on January 1, 2017 (for each pro forma Statement of Income) and September 30, 2018 (for the pro forma Balance Sheet).
d) Exhibits
CorEnergy Infrastructure Trust, Inc. Exhibit
EX-10.10.1 2 portlandpurchaseandsaleagr.htm EXHIBIT 10.10.1 Exhibit Exhibit 10.10.1Execution VersionPURCHASE AND SALE AGREEMENTby and amongLCP OREGON HOLDINGS,…
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About CorEnergy Infrastructure Trust, Inc. (NYSE:CORR)
CorEnergy Infrastructure Trust, Inc. is focused on acquiring and financing midstream and downstream real estate assets within the United States energy infrastructure sector and concurrently entering into long-term triple-net participating leases with energy companies. The Company also provides other types of capital, including loans secured by energy infrastructure assets. The Company owns assets, such as pipelines, storage terminals, and transmission and distribution assets. It assets include Grand Isle Gathering System, which is a subsea, crude oil pipeline system in the Gulf of Mexico; Pinedale Liquids Gathering System, which consists of approximately 150 miles of pipelines; Portland Terminal Facility, which is a rail and marine facility property; MoGas Pipeline System, which delivers natural gas to both investor-owned and municipal local distribution systems, and Omega Pipeline, which provides natural gas marketing services.
