Ferrellgas Partners completes financial restructuring

April 2, 2021 By    

Ferrellgas Partners LP completed its previously announced restructuring transactions, which strengthen its balance sheet while allowing it to continue as an employee-owned enterprise, according to the company.

“I am pleased to announce that we have followed through, as promised, on our commitment to strengthen our balance sheet and remain an employee-owned business that will continue to provide exceptional service to our more than 700,000 nationwide customers well into the future,” says James E. Ferrell, chairman of the Ferrellgas board of directors, and also the president and CEO, in a company statement. “This is a significant milestone for the company and its nearly 4,500 employees, and serves as irrefutable evidence that Ferrellgas, and its leading tank exchange brand, Blue Rhino, will continue as a leader in the U.S. propane industry.”

Ferrellgas Partners had entered into a Transaction Support Agreement (TSA) with a majority of the holders of the unsecured notes that were due June 2020.

The TSA included a comprehensive restructuring plan – for both the parent master limited partnership to address the maturity of its notes and for Ferrellgas LP, its operating entity, to address over $2 billion in debt obligations.

Based on the latest transactions, according to the partnership, Ferrellgas LP has successfully:

  • Established a new $350 million senior secured revolving credit facility.
  • Issued $1.475 billion in new senior unsecured notes due in 2026 and 2029.
  • Sold $700 million in senior preferred equity.

The proceeds of these transactions have been used to satisfy, in full, Ferrellgas LP’s existing debt obligations, according to the company.

Ferrellgas Partners also says its plan of reorganization, by which the existing notes are to be exchanged for new limited partnership units, has gone effective, allowing it to successfully emerge from Chapter 11 bankruptcy protection.

The restructuring transactions enable the nearly 100-year-old propane retailer to continue to serve the propane needs of millions of Americans in all 50 states and Puerto Rico, during a pandemic year that was also heavily impacted by record-cold temperatures in many parts of the country.

Featured photo by LP Gas staff

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About the Author:

Brian Richesson is the editor in chief of LP Gas Magazine. Contact him at brichesson@northcoastmedia.net or 216-706-3748.

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