ITEM 1.02 Termination of a Material Definitive Agreement.
Upon completion of the Merger, PetroLogistics caused PL Propylene LLC, a
Delaware limited liability company and subsidiary of PetroLogistics ("PL
Propylene"), to terminate the existing $170.0 million amended and restated
credit agreement, dated as of March 28, 2013, among PL Propylene, as borrower,
PetroLogistics, as parent, the lenders party thereto, co-arrangers named
therein, and Morgan Stanley Senior Funding, Inc., as sole lead arranger,
administrative agent, collateral agent and swingline lender (the "Prior Credit
Facility"). With proceeds of loans borrowed by PetroLogistics under the New
Credit Facility (as defined below), all indebtedness, liabilities and
obligations (other than contingent reimbursement and indemnification obligations
for which a claim had not been made as of the termination date) were paid in
full, and all commitments of the lenders to extend credit under the Prior Credit
Facility were terminated in full. No prepayment or early termination penalties
or premiums were incurred as a result of the termination of the Prior Credit
Prior to the Merger, Merger Sub entered into a $290.0 million unsecured
revolving credit facility as the borrower with the lenders party thereto and FHR
Liquidity Holdings I, LLC, as administrative agent (the "New Credit Facility").
PetroLogistics (as successor by merger to Merger Sub) assumed the rights and
obligations of Merger Sub under the New Credit Facility. The New Credit
Facility matures on July 1, 2020. The lender under the New Credit Facility is
an affiliate of New Parent. The lender's obligations under the New Credit
Facility, including the obligations to extend credit, are guaranteed by New
Parent. The New Credit Facility is pari passu in right of payment with the
outstanding 6.25% Senior Notes (the "Notes") of PetroLogistics and
PetroLogistics Finance Corp. ("Finance Corp." and together with PetroLogistics,
The New Credit Facility accrues interest, at the election of the borrower, at an
alternative base rate or based on LIBOR, in each case, plus an applicable
margin. In addition, the New Credit Facility also requires PetroLogistics to
pay an unused commitment fee. The New Credit Facility contains customary
affirmative and negative covenants and events of default for financings of this
nature for investment grade borrowers.
ITEM 2.01 Completion of Acquisition or Disposition of Assets.
On July 16, 2014
, the Merger was consummated and GP Holdings
transferred to an
indirect subsidiary of New Parent 100% of the issued and outstanding membership
interests in General Partner (the "GP Equity Transfer").
Upon the Merger and GP Equity Transfer becoming effective (the "Effective
Time"), by virtue of the Merger and without any action on the part of the MLP
Entities, (a) each equity interest in PetroLogistics
representing a fractional
part of the equity interests of all limited partners of PetroLogistics
such equity interest, a "Common Unit") issued and outstanding and owned by
holders, other than the Sponsors and the Founding Unitholders (each as defined
below), of Common Units (the "Public Unitholders") immediately prior to the
Effective Time was cancelled and converted automatically into the right to
receive an amount in cash equal to $14.00
, without interest and subject to any
required withholding taxes (the "Public Merger Consideration"), and (b) each
Common Unit issued and outstanding and owned by (i) YSOF Propylene Investor LLC
York Special Opportunities Fund AIV II, L.P.
, York Special Opportunities Fund
, YSOF (PIV-B) SUB II, LLC, LG Propylene LLC
, Lindsay Goldberg &
Bessemer II AIV L.P.
, Lindsay Goldberg & Bessemer II-A AIV L.P.
Goldberg & Bessemer II-A NNAIV L.P.
, Lindsay Goldberg & Bessemer II PIV AIV
, Lindsay Goldberg & Bessemer II-BT AIV L.P.
, Lindsay Goldberg Co-Investment
II AIV L.P.
, Lindsay Goldberg Employee Co-Investment II, L.P.
, and Dean Ventures
(collectively, the "Sponsors"), and (ii) David Lumpkins
and a related family partnership and family trust (collectively, the
"Founding Unitholders" and, together with the Sponsors and the Public
Unitholders, the "Unitholders") immediately prior to the Effective Time was
cancelled and converted automatically into the right to receive an amount in
cash equal to $12.00
, without interest and subject to any required withholding
taxes, in each case, upon the terms and subject to the conditions set forth in
the Merger Agreement. No additional consideration was delivered in exchange for
the GP Equity Transfer.
In addition, a one-time cash distribution of $0.40
per Common Unit, payable to
the Unitholders of record on the day preceding the closing date of the Merger,
was declared and made in accordance with the provisions of the Merger Agreement
(the "Merger Related Distribution").
Also as of the Effective Time, each phantom unit granted pursuant to the
PetroLogistics Long Term Incentive Plan, adopted May 4, 2012
"Phantom Units"), outstanding as of immediately prior to the Effective Time,
whether or not vested, (i) was canceled and converted into the right to receive
from New Parent (through General Partner) an amount of cash equal to the Public
Merger Consideration plus the Merger Related Distribution for each Phantom Unit
that was issued and outstanding (the "Phantom Unit Consideration"), (ii) is no
longer outstanding, and (iii) ceased to exist. Following the Effective Time,
New Parent will cause the General Partner to pay the Phantom Unit Consideration
to each holder of Phantom Units, upon the terms and subject to the conditions
set forth in the Merger Agreement, in full satisfaction of all rights pertaining
to the Phantom Units formerly outstanding.
No dissenters' or appraisal rights were available, or will be available, with
respect to the transactions contemplated by the Merger Agreement.
The foregoing description of the Merger, the GP Equity Transfer and the Merger
. . .
ITEM 3.01 Notice of Delisting or Failure to Satisfy a Continued Delisting
Rule or Standard; Transfer of Listing.
On July 16, 2014
, in connection with completion of the Merger, PetroLogistics
notified the New York Stock Exchange
(the "NYSE") of its intent to remove the
Common Units from listing on the NYSE
and requested that the NYSE
file with the
Securities and Exchange Commission
(the "SEC") an application on Form 25 to
delist and deregister the Common Units under Section 12(b) of the Securities
Exchange Act of 1934 (the "Exchange Act"). On July 16, 2014
, the NYSE
Form 25 with the SEC
. In addition, on July 16, 2014
a Form 15 with respect to the Notes, requesting that reporting
obligations of the Issuers and PL Propylene under applicable provisions of the
Exchange Act with respect to the Notes be suspended. In accordance with the
terms of the Indenture governing the Notes (the "Indenture"), PetroLogistics
will continue to file reports with the SEC
subsequently file with the SEC
a Form 15 with respect to the Common Units.
ITEM 3.03 Material Modifications to Rights of Security Holders.
The information set forth under Item 2.01, Item 3.01 and Item 8.01 under the
subheading "Covenant Termination under Indenture" of this Report is incorporated
into this Item 3.03 by reference.
ITEM 5.01 Changes in Control of Registrant.
As a result of the Merger, a change in control of PetroLogistics
information set forth under Item 2.01 of this Report is incorporated into this
Item 5.01 by reference. Merger Sub obtained the funds to effect the Merger and
the other transactions contemplated by the Merger Agreement from the New Parent
and its affiliates.
ITEM 5.02 Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
In connection with the Merger, as of the Effective Time, Jaime Buehl-Reichard
Alan E. Goldberg
, Lance L. Hirt
, Zalmie Jacobs, Phillip D. Kramer
, Robert D.
, David Lumpkins
, Nathan Ticatch
, John B. Walker
, Andrew S. Weinberg
Hallie A. Vanderhider
resigned as members of the Board of Directors of General
Partner and as members of each committee of the Board of Directors on which they
served immediately prior to the Effective Time. In connection with the Merger,
as of the Effective Time, David Lumpkins
, Nathan Ticatch
, Sharon Spurlin
resigned as officers of General Partner.
Immediately following the Effective Time, Raffaele G. Fazio
was appointed as the
sole member of the Board of Directors and President of the General Partner.
, age 44, is currently the Deputy General Counsel-Corporate and
Commercial of Koch Companies Public Sector, LLC
. Mr. Fazio
has been employed by
affiliates of Koch Industries, Inc.
for more than five years.
The information set forth under Item 2.01 of this Report is incorporated into
this Item 5.02 by reference.
ITEM 8.01 Other Events.
Payment of Merger Related Distribution
As discussed in Item 2.01 of this Report, in connection with consummation of the
declared and made the Merger Related Distribution,
payable to holders of record of the Common Units on July 15, 2014
. The Merger
Related Distribution is $0.40
per Common Unit.
Covenant Termination under Indenture
In connection with the consummation of the Merger and other transactions and
agreements related thereto, including entry into the New Credit Facility, the
ratings of the Notes have been upgraded by Standard & Poor's Ratings Services
from B to AA- and by Moody's Investors Service from B2 to A3, in each case on
July 16, 2014
. As a result, under Section 4.19 of the Indenture, dated as of
March 28, 2013
, among the Issuers, PL Propylene, as guarantor, and Wells Fargo
Bank, National Association
, as trustee, certain covenants in the Notes are no
longer applicable to the Notes as of such date.