NGL ENERGY PARTNERS LP (NYSE:NGL) Files An 8-K Material Modification to Rights of Security Holders
Item 3.03 Material Modification to Rights of Security
Holders
The information set forth under Item 5.03 is incorporated by
reference into this Item 3.03.
Item 5.03 Amendments to Articles of
Incorporation or Bylaws; Change in Fiscal Year
Amended and Restated Partnership Agreement
On June13, 2017, NGL Energy Holdings LLC, a Delaware limited
liability company and the general partner (the General Partner)
of NGL Energy Partners LP, a Delaware limited partnership (the
Partnership), executed the Fourth Amended and Restated Agreement
of Limited Partnership of the Partnership (the Amended and
Restated Partnership Agreement) for the purpose of creating and
defining the preferences, rights, powers and terms of the 9.00%
ClassB Fixed-to-Floating Rate Cumulative Redeemable Perpetual
Preferred Units, liquidation preference $25.00 per ClassB
Preferred Unit, representing limited partner interests in the
Partnership (the ClassB Preferred Units). The amendments effected
by the Amended and Restated Partnership Agreement provide for the
issuance of the ClassB Preferred Units, in summary, with the
features described below.
The ClassB Preferred Units rank (a)senior to common units
representing limited partner interests in the Partnership (Common
Units) and to each other class or series of limited partner
interests or other equity securities of the Partnership
established after the original issue date of the ClassB Preferred
Units (the Original Issue Date) that is not expressly made senior
to or on parity with the ClassB Preferred Units as to the payment
of distributions (Junior Securities), (b)on parity with (i)the
Partnerships 10.75%ClassA Convertible Preferred Units (ClassA
Preferred Units) and (ii)any class or series of limited partner
interests or other equity securities of the Partnership
established after the Original Issue Date with terms expressly
providing that such class or series ranks on parity with the
ClassB Preferred Units as to the payment of distributions (the
securities described in clauses (i)and(ii)being referred to
herein as Parity Securities) and (c)junior to each other class or
series of limited partner interests or equity securities of the
Partnership established after the Original Issue Date with terms
expressly made senior to the ClassB Preferred Units as to the
payment of distributions (Senior Securities).
Distributions on the ClassB Preferred Units are cumulative from
the Original Issue Date and will be payable quarterly in arrears
on January15, April15, July15 and October15 of each year,
commencing on October15, 2017, when, as and if declared by the
General Partner out of legally available funds for such purpose.
Distributions on the ClassB Preferred Units will be paid on an
equal priority basis with distributions on outstanding Parity
Securities, if any. Distributions will be paid to holders of
record as of the opening of business on the January1, April1,
July1 or October1 next preceding the Distribution Payment Date.
The initial distribution on the ClassB Preferred Units will
accumulate from the Original Issue Date until September30, 2017
and will be payable on October15, 2017. The initial distribution
rate for the ClassB Preferred Units from and including the
Original Issue Date to, but not including, July1,2022 will be
9.00% per annum of the $25.00 liquidation preference per unit
(equal to $2.25 per unit per annum). On and after July1,2022,
distributions on the ClassB Preferred Units will accumulate for
each quarterly distribution period at a percentage of the $25.00
liquidation preference equal to the applicable Three-Month LIBOR
(as defined in the Amended and Restated Partnership Agreement)
plus a spread of 721.3 basis points.
No distribution may be declared or paid or set apart for payment
on any Junior Securities (other than a distribution payable
solely in Junior Securities), unless full cumulative
distributions have been or contemporaneously are being paid or
provided for on all outstanding ClassB Preferred Units and any
Parity Securities through the most recent respective distribution
payment dates.
At any time on or after July1,2022, the Partnership may redeem,
in whole or in part, the ClassB Preferred Units at a redemption
price in cash of $25.00 per ClassB Preferred Unit plus an amount
equal to all accumulated and unpaid distributions thereon to, but
not including, the date of redemption, regardless of whether
declared. The Partnership must provide not less than 30 days and
not more than 60 days advance written notice of any such
redemption.
Upon the occurrence of a Change of Control (as defined in the
Amended and Restated Partnership Agreement), the Partnership may,
at its option, redeem the ClassB Preferred Units, in whole or in
part, within 120 days after the first date on which such Change
of Control occurred, by paying $25.00 per ClassB Preferred Unit,
plus all accumulated and unpaid distributions to, but not
including, the date of redemption, regardless of whether
declared. If, prior to the Change of Control Conversion Date (as
defined in the Amended and Restated Partnership Agreement), the
Partnership exercises its redemption rights relating to ClassB
Preferred Units, holders of the ClassB Preferred Units that the
Partnership has elected to redeem will not have the conversion
right related to a Change of Control.
Upon the occurrence of a Change of Control, each holder of
ClassB Preferred Units will have the right (unless, prior to
the Change of Control Conversion Date, the Partnership provides
notice of its election to redeem the ClassB Preferred Units) to
convert some or all of the ClassB Preferred Units held by such
holder on the Change of Control Conversion Date into a number
of Common Units per ClassB Preferred Unit to be converted equal
to the lesser of (a)the quotient obtained by dividing (i)the
sum of the $25.00 liquidation preference plus the amount of any
accumulated and unpaid distributions to, but not including, the
Change of Control Conversion Date (unless the Change of Control
Conversion Date is after a record date for a ClassB Preferred
Unit distribution payment and prior to the corresponding
Distribution Payment Date, in which case no additional amount
for such accumulated and unpaid distribution will be included
in this sum) by (ii)the Common Unit Price, and (b)3.63636,
subject, in each case, to certain exceptions and adjustments.
Any amounts distributed by the Partnership upon its liquidation
will be made to its partners in accordance with their
respective positive capital account balances. The holders of
outstanding ClassB Preferred Units will be specially allocated
items of the Partnerships gross income and gain in a manner
designed to achieve, in the event of any liquidation,
dissolution or winding up of the Partnerships affairs, whether
voluntary or involuntary, a capital account balance equal to
the liquidation preference of $25.00 per ClassB Preferred Unit
(subject to adjustment for any splits, combinations or similar
adjustment to the ClassB Preferred Units). However, if the
amount of the Partnerships gross income and gain available to
be specially allocated to the ClassB Preferred Units is not
sufficient to cause the capital account of a ClassB Preferred
Unit to equal the liquidation preference of a ClassB Preferred
Unit, then the amount that a holder of ClassB Preferred Units
would receive upon liquidation may be less than the ClassB
Preferred Unit liquidation preference. Any accumulated and
unpaid distributions on the ClassB Preferred Units will be paid
prior to any distributions in liquidation made in accordance
with capital accounts.
The ClassB Preferred Units will have no voting rights, except
as set forth below or as otherwise provided by Delaware law.
Unless the Partnership has received the affirmative vote or
consent of the holders of at least two-thirds of the
outstanding ClassB Preferred Units, voting as a separate class,
the Partnership may not adopt any amendment to the Amended and
Restated Partnership Agreement that has a material adverse
effect on the terms of the ClassB Preferred Units. In addition,
unless the Partnership has received the affirmative vote or
consent of the holders of at least two-thirds of the
outstanding ClassB Preferred Units, voting as a single class
with holders of any future Parity Securities upon which like
voting rights have been conferred and are exercisable, the
Partnership may not (a)create or issue any additional Parity
Securities (including any additional ClassA Preferred Units) if
the cumulative distributions payable on then outstanding ClassB
Preferred Units or Parity Securities are in arrears or
(b)create or issue any Senior Securities. On any matter
described above on which the holders of the ClassB Preferred
Units are entitled to vote as a class, such holders will be
entitled to one vote per ClassB Preferred Unit.
The description of the Amended and Restated Partnership
Agreement contained in this Item 5.03 is qualified in its
entirety by reference to the full text of the Amended and
Restated Partnership Agreement, which is filed as Exhibit3.1
hereto and is incorporated by reference herein.
Item 8.01 Other Events.
On June13, 2017, the Partnership issued 8,400,000 Class B
Preferred Units, which includes 1,000,000 Class B Preferred
Units issued to the partial exercise of the underwriters’
option to purchase an additional 1,110,000 Class B Preferred
Units to cover overallotments, upon the closing of its
previously announced registered public offering of such units.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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ExhibitNo. |
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Description |
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3.1 |
Fourth Amended and Restated Agreement of Limited |
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5.1 |
Opinion of Andrews Kurth Kenyon LLP regarding legality of |
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8.1 |
Opinion of Andrews Kurth Kenyon LLP regarding tax |
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23.1 |
Consent of Andrews Kurth Kenyon (included in its opinions |
About NGL ENERGY PARTNERS LP (NYSE:NGL)
NGL Energy Partners LP owns and operates a vertically integrated energy business. The Company’s segments are crude oil logistics, water solutions, liquids, retail propane, refined products and renewables, and corporate and other. Its crude oil logistics segment includes owned and leased crude oil storage terminals, and owned and leased pipeline injection stations. Its water solutions segment provides services for the treatment and disposal of wastewater generated from crude oil and natural gas production, and for the disposal of solids, such as tank bottoms and drilling fluids. Its liquids segment supplies natural gas liquids to retailers, wholesalers, refiners and petrochemical plants throughout the United States and in Canada. Its retail propane segment consists of the retail marketing, and sale and distribution of propane and distillates, among others. The Company’s refined products and renewables segment is engaged in gasoline, diesel, ethanol and biodiesel marketing operations.