This Amendment No. 8 to Schedule 13D (“Amendment No. 8”) is being filed by the undersigned, pursuant to §240.13d-2(a), with respect to the Common Units (the “Common Units”) of Sanchez Midstream Partners LP (the “Issuer” or the “Partnership”) that the Reporting Persons are deemed to beneficially own. The Issuer’s principal executive offices are located at 1360 Post Oak Blvd, Suite 2400, Houston, TX, 77056. This Amendment No. 8 amends and supplements the statement on the Schedule 13D filed with the Securities and Exchange Commission (the “SEC”) on October 26, 2015, as amended by Amendment No. 1, filed with the SEC on January 27, 2017, Amendment No. 2, filed with the SEC on February 22, 2017, Amendment No. 3, filed with the SEC on May 31, 2017, Amendment No. 4 filed with the SEC on February 4, 2019, Amendment No. 5, filed with the SEC on August 6, 2019, Amendment No. 6, filed with the SEC on September 4, 2020, and Amendment No. 7, filed with the SEC on September 9, 2020 (collectively the “Schedule 13D”). Except as specifically provided herein, this Amendment No. 8 does not modify any of the information previously reported in the Schedule 13D. Capitalized terms used herein and not otherwise defined in this Amendment No. 8 have the meanings set forth in the Schedule 13D.
(a-c, f) This Schedule 13D is filed on behalf of each of the following persons (collectively, the “Reporting Persons”): (i) SP Common Equity Subsidiary LLC, a Delaware limited liability company (“SPCE Sub”), (ii) Stonepeak Catarina Holdings LLC, a Delaware limited liability company (“Stonepeak Catarina”); (iii) Stonepeak Catarina Upper Holdings LLC, a Delaware limited liability company; (iv) Stonepeak Infrastructure Fund (Orion AIV) LP, a Delaware limited partnership; (v) Stonepeak Associates LLC, a Delaware limited liability company; (vi) Stonepeak GP Holdings LP, a Delaware limited partnership; (vii) Stonepeak GP Investors LLC, a Delaware limited liability company; (viii) Stonepeak GP Investors Manager LLC, a Delaware limited liability company; (ix) Michael Dorrell (“Mr. Dorrell”), a citizen of the United States of America; and (x) Trent Vichie (“Mr. Vichie”), a citizen of the United States of America (each of (ii) through (x), collectively, the “Catarina Reporting Persons”).
This Schedule 13D relates to Common Units held directly by SPCE Sub and Common Units, Class C Preferred Units and a Warrant to acquire Common Units held directly by Stonepeak Catarina. SPCE Sub is an entity formed to hold Common Units. Stonepeak Catarina is the sole member of SPCE Sub. Stonepeak Catarina Upper Holdings LLC is the managing member of Stonepeak Catarina Holdings LLC. Stonepeak Infrastructure Fund (Orion AIV) LP is the managing member of Stonepeak Catarina Upper Holdings LLC. Stonepeak Associates LLC is the general partner of Stonepeak Infrastructure Fund (Orion AIV) LP. Stonepeak GP Holdings LP is the sole member of Stonepeak Associates LLC. Stonepeak GP Investors LLC is the general partner of Stonepeak GP Holdings LP. Stonepeak GP Investors Manager LLC is the managing member of Stonepeak GP Investors LLC. Each of Mr. Dorrell and Mr. Vichie serve as a managing member of Stonepeak GP Investors Manager LLC.
The address of the principal office for each of the Reporting Persons is 55 Hudson Yards, 550 W. 34th St., 48th Floor, New York, NY 10001.
The agreement among each of the Reporting Persons to file this Schedule 13D jointly in accordance with Rule 13d-1(k) of the Exchange Act is attached hereto as Exhibit P.
(d) None of the Reporting Persons has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) None of the Reporting Persons has, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and, as a result of such proceeding, was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.
SCHEDULE 13D
| CUSIP No: 79971C201 | Page 13 of 18 Pages |
Item 4 of the Schedule 13D is hereby amended by adding the following:
Following completion of the contribution to SPCE Sub of 4,650,439 Common Units held by the Sanchez Holders (including 140,647 Common Units that are subject to vesting), as described in Amendment No. 7, effective October 5, 2020, Stonepeak Catarina became the sole member of SPCE Sub.
In addition,
on October 6, 2020, SP Holdings, a wholly-owned subsidiary of Stonepeak Catarina and the sole member of the General Partner,
began engaging in non-binding discussions with the Board about terminating or, alternatively, amending and restating the Amended and Restated Shared Services Agreement (the “Agreement”), dated as of March 6, 2015, between SP Holdings and the Partnership
, which is filed as exhibit 10.14 to the Partnership’s Annual Report on Form 10-K filed March 13, 2020. If terminated, which SP Holdings may unilaterally do upon 180 days
’ prior written notice to the Partnership, the Partnership would be required to pay to SP Holdings an amount
that is estimated to be in excess of $40 million (the “Termination Fee”), inclusive of the accrued quarterly asset management fee payable in Common Units each quarter the Agreement is in effect.
In accordance with the Agreement, SP Holdings
has the option to receive payment of such Termination Fee in cash or Common Units.
As an alternative to terminating the Agreement, SP Holdings is also discussing with the Board amending and restating the Agreement to, among other things, eliminate SP Holdings’ right to receive certain substantial fees payable by the Partnership for services rendered to the Partnership and upon termination of the Agreement, in exchange for the issuance by the Partnership of a number of Common Units to SP Holdings, the exact amount of which is subject to negotiation.
To the extent either of the forgoing alternatives is effected and results in the Partnership issuing Common Units to SP Holdings
or its designee, SP Holdings and its affiliates, including the Reporting Persons, may have the ability to cause the General Partner to exercise its right to purchase all of the Common Units outstanding not held by the General Partner or its controlled affiliates, pursuant to Section 15.1 of the Third Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of August 2, 2019
, which is filed as exhibit 3.4 to the to the Partnership’s Annual Report on Form 10-K filed March 13, 2020.
The Reporting Persons expect to continue to engage in discussions and negotiations regarding the forgoing alternatives. Any amendment and/or restatement of the Agreement is subject to the satisfactory negotiation of definitive terms and negotiation and execution of a definitive agreement.
The foregoing disclosures shall not be deemed to provide any assurances that any of the foregoing will be consummated or of any terms or timing
of the foregoing. The Reporting Persons retain the right to withdraw or modify their plans at any time.
The Reporting Persons reserve the right to formulate other plans or make other proposals which could result in one or more of the transactions, events or actions specified in clauses (a) through (j) of Item 4 of Schedule 13D, and to modify or withdraw any such plan or proposal at any time.
