Emerge Energy Services LP (NYSE:EMES) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
Second Lien Term Loan Agreement
On April 12, 2017, Emerge Energy Services LP (the Partnership)
entered into a new $40.0 million second lien senior secured term
loan facility with the Partnerships wholly owned subsidiaries
Emerge Energy Services Operating LLC and Superior Silica Sands
LLC, as borrowers (the Borrowers) and U.S. Bank National
Association as disbursing agent and collateral agent (the Second
Lien Term Loan Agreement). The Second Lien Term Loan Agreement
matures on April 12, 2022. Proceeds of the new term credit
facility will be used to (i) pay down a portion of the
Partnerships existing revolving credit facility, (ii) fund the
acquisition referred to in Item 7.01 below, (iii) pay fees and
expenses incurred in connection with the new term credit facility
and (iv) for general business purposes. Substantially all of the
Partnerships assets are pledged as collateral on a second lien
basis under the Second Lien Term Loan Agreement.
The Second Lien Term Loan Agreement contains various covenants
and restrictive provisions and also requires the maintenance of
certain financial covenants as follows:
beginning with the fiscal quarter ending March 31, 2018, an
interest coverage ratio of not less than 1.70:1.00 increasing
quarterly thereafter to 2.55:1.00 for the fiscal quarter ending
March 31, 2019 and thereafter;
beginning with the fiscal quarter ending June 30, 2017, a minimum
EBITDA of not less than $637,500 for such fiscal quarter,
increasing quarterly to $50,000,000 for the four fiscal quarter
period ending June 30, 2019 and thereafter; and
minimum excess availability of at least $12,750,000 so long as
the Revolving Credit Agreement (as defined below) remains in
effect;
Loans under the Second Lien Term Loan Agreement will bear
interest at the Partnerships option at either the base rate plus
9.00%; or LIBOR plus 10.00%.
The foregoing description of the Second Lien Term Loan Agreement
is not complete and is qualified in its entirety by reference to
the full text of the Second Lien Term Loan Agreement, which is
attached as Exhibit 10.1 to this Current Report on Form 8-K and
incorporated in this Item 1.01 by reference.
Amendment to Revolving Credit Agreement
On April 12, 2017, the Partnership entered into Amendment No. 12
(the Amendment) to the amended and restated revolving credit and
security agreement, dated as of June 27, 2014 (as amended by the
Amendment, the Revolving Credit Agreement), among the
Partnership, as parent guarantor, the Borrowers, as borrowers,
PNC Bank, National Association, as administrative agent and
collateral agent, and the other lenders party thereto. The
Amendment amended the Revolving Credit Agreement to permit the
Partnership and the Borrowers to enter into the Second Lien Term
Loan Agreement and to reduce the revolving credit facility to
$190,000,000, and further reduce the revolving credit facility on
a quarterly basis to $125,000,000 for the quarter beginning
January 1, 2019.
The foregoing description of the Amendment is not complete and is
qualified in its entirety by reference to the full text of the
Amendment, which is attached as Exhibit 10.2 to this Current
Report on Form 8-K and incorporated in this Item 1.01 by
reference.
Item 2.03 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
The description of the Second Lien Term Loan Agreement and the
Amendment in Item 1.01 above is incorporated into this Item 2.03
by reference.
Item 7.01 Regulation FD Disclosure.
In accordance with General Instruction B.2 of Form 8-K, the
following information in this Current Report on Form 8-K
(including Exhibit 99.1) is furnished to Item 7.01 and shall
not be deemed to be filed for the purpose of Section 18 of the
Securities Exchange Act of 1934, as amended (the Exchange Act),
or otherwise subject to the liabilities of that section, nor
shall such information or exhibit be deemed incorporated by
reference in any filing under the Securities Act of 1933, as
amended, or the Exchange Act, except as shall be expressly set
forth by specific reference in such a filing. This Current
Report on Form 8-K will not be deemed an admission as to the
materiality of any information in the report that is required
to be disclosed solely by Regulation FD.
On April 17, 2017, the Partnership issued a press release
announcing the entry into a definitive agreement to acquire
substantially all of the assets of Materials Holding Company,
Inc., Osburn Materials, Inc., Osburn Sand Co. and South Lehr,
Inc. relating to the mining, production, sale and transport of
a variety of sand products. A copy of the press releases is
furnished as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
|
Exhibit Number |
|
Description |
|
10.1 |
Second Lien Term Loan Agreement. |
|
|
10.2 |
Amendment No. 12 to Amended and Restated Revolving Credit |
|
|
99.1 |
Press Release dated April 17, 2017. |
About Emerge Energy Services LP (NYSE:EMES)
Emerge Energy Services LP owns, operates, acquires and develops a portfolio of energy service assets. The Company’s segments include Sand segment, Fuel segment and Corporate. The Company’s Sand segment consists of the production and sale of various grades of industrial sand primarily used in the extraction of oil and natural gas, as well as the production of building products and foundry materials. Its Fuel segment operates approximately two terminals and over two transmix processing facilities that are located in the Dallas-Fort Worth, Texas area and Birmingham, Alabama. In addition to refining transmix, the Fuel segment sells a suite of complementary fuel products and services, including third-party terminaling services, certain reclamation services and blending of renewable fuels. The Company’s other services include blending of renewable fuels into petroleum products, and the manufacture of biodiesel at its Birmingham facility. Emerge Energy Services LP (NYSE:EMES) Recent Trading Information
Emerge Energy Services LP (NYSE:EMES) closed its last trading session down -0.71 at 13.63 with 669,181 shares trading hands.
