VTTI BV has submitted a proposal to buy out VTTI Energy Partners LP, the MLP it established in April 2014.
The move would be effected through a wholly owned subsidiary of VTTI which would acquire all publicly held common units of the partnership for US$18.75 a unit, representing a 3 percent premium over the 30 trading day volume weighted average price as of 1 March 2017.
Despite two drop down transactions and six distribution increases since mid-2015, VTTI said the partnership’s common units have performed below expectations despite the recent improvement in commodity prices and investor sentiment in the broader market.
In addition, 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, VTTI does not intend to execute any further dropdowns to the partnership of additional assets or equity in VTTI MLP BV, the holding company for the partnership’s operating subsidiaries.
8th March 2017