From Staff Reports
Kilgore-based Martin Midstream Partners has agreed to sell its East Texas Pipeline to an undisclosed buyer for $17.5 million.
The Monday afternoon announcement of the agreement added that Martin would use the proceeds to continue reducing debt under its revolving credit facility.
The deal will have an immediate impact on earnings, Martin said, as the pipeline has been idle since September and produced a trailing 12-month net loss of $1.6 million. That reduced earnings by $900,000, the partnership said.
“The East Texas Pipeline sale is one more step along the Partnership’s strategic path of selling non-core assets and using the proceeds to reduce leverage,” Rueben Martin, president and CEO of the partnership, said in a statement.
The 200-mile pipeline carries natural gas liquids between Kilgore and Beaumont.
Last month, Martin announced the sale of its membership interests in Arcadia Gas Storage, Cadeville Gas Storage, Monroe Gas Storage Co. and Perryville Gas Storage to Hartree Cardinal Gas. As in Monday’s deal, the net proceeds of about $212 million were used to reduce revolving debt.
Both deals are continuation of an effort to reduce the partnership’s leverage. It began in 2018, with divestment of a pipeline in West Texas and terminal operations in Nevada. Early this year, it announced acquisition of Martin Transport Inc. from Martin Resource Management Corp.
Combined, the transactions have generated net cash proceeds of about $300 million.