| Item 1.01 | Entry into a Material Definitive Agreement. |
On March 20, 2023, USDP CCR LLC (the “Seller”), an indirect, wholly-owned subsidiary of USD Partners LP (the “Partnership”), entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with South 49 Holdings Ltd., a member of the Midstream Energy Partners group of companies (collectively, the “Buyer”). Upon the terms and subject to the conditions set forth in the Purchase Agreement, the Seller agreed to sell the Partnership’s Casper rail terminal, by means of a sale of all of the equity interests of the subsidiary of the Partnership which owns the terminal, to the Buyer for a cash purchase price of approximately $33 million (the “Transaction”), subject to customary adjustments. The Transaction is expected to close prior to the end of the second quarter of 2023. The Partnership intends to use a majority of the proceeds from the Transaction, net of expenses, to repay borrowings outstanding under the Partnership’s revolving credit facility and to retain the remaining proceeds to support general partnership purposes.
The Purchase Agreement contains customary representations and warranties, covenants, termination rights, and indemnification provisions, subject to specified limitations. In addition, the completion of the Transaction is subject to certain customary conditions.
The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Purchase Agreement attached as Exhibit 10.1 to this Form 8-K, which is incorporated herein by reference.
| Item 7.01 | Regulation FD Disclosure. |
On March 23, 2023, the Partnership issued a press release announcing certain of the matters described in this Current Report on Form 8-K. A copy of this press release is attached hereto as Exhibit 99.1 to this Current Report. The information set forth in this item 7.01 and in Exhibit 99.1 shall not be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
Cautionary Note Regarding Forward-Looking Statements
This Current Report contains forward-looking statements within the meaning of U.S. federal securities laws, including statements with respect closing of the Transaction and the use of net proceeds from the Transaction. Words and phrases such as “expect” and “intend” and similar expressions are used to identify such forward-looking statements. However, the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements relating to the Partnership are based on management’s expectations, estimates and projections about the Partnership, its interests and the energy industry in general on the date this press release was issued. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. Factors that could cause actual results or events to differ materially from those described in the forward-looking statements include those factors set forth under the heading “Risk Factors” and elsewhere in the Partnership’s most recent Annual Report on Form 10-K and in the Partnership’s subsequent filings with the Securities and Exchange Commission. The Partnership is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
| * | Certain schedules and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K and will be provided to the SEC upon request |
