PetroLogistics amends, extends consent bid for 6¼% notes due 2020

By Susanna Moon

Chicago, July 7 – PetroLogistics LP and PetroLogistics Finance Corp. extended and amended the consent solicitation for their 6¼% senior notes due 2020.

The solicitation will now end at 5 p.m. ET on July 9, extended from 5 p.m. ET on July 8 and, before that, from 5 p.m. ET on July 2.

The consent payment also was amended to provide that Flint Hills Resources, LLC will pay $1,825,000 in cash to holders who delivered consents by the end of the solicitation, according to a company press release.

The total consent amount will be paid pro rata on the aggregate principal amount of the notes for which consents are delivered. If consents are delivered for all outstanding notes, each holder will receive the minimum consent payment of $5.00 per $1,000 principal amount.

The consent solicitation also is being amended to provide that 100% of the pro rata consent amount will be paid promptly after the solicitation ends if

• The issuers have received consents for a majority of the outstanding notes voting as a single class;

• The consent solicitation is not terminated before the company receives the needed consents;

• The supplemental indenture is executed and becomes effective; and

• The pro rata consent payment is not prohibited by any law, regulation or proceeding, the release noted.

As previously announced, the companies are making the consent solicitation at the request of Flint Hills Resources, LLC, a subsidiary of Koch Industries, Inc. The solicitation is in connection with Flint Hills’ acquisition of PetroLogistics, which was announced on May 27.

The supplemental indenture containing the proposed amendments will not become operative until the completion of the acquisition of the company by Flint Hills.

The consent solicitation began on June 24.

As of the original expiration time, noteholders may no longer withdraw their consents.

The companies are soliciting consents for amendments to the notes indenture that would replace the requirement that PetroLogistics file reports with the Securities and Exchange Commission with one that it provide holders with a specified set of information that is more typical of debt securities issued in a Rule 144A-for-life transaction, as previously announced.

A previous release noted that the amendments would also remove the prohibition on the consolidation or merger of PetroLogistics Finance with or into an entity that is not a corporation.

The company previously said that Flint Hills will make a cash payment of $5.00 per $1,000 aggregate principal amount of notes for those who deliver consents, with 25% of the consent payment to be settled promptly and the remaining 75% to be paid following the close of the merger.

The merger is expected to be completed by Nov. 27.

In connection with the merger, Flint Hills will also provide PetroLogistics with a new unsecured pari passu revolving credit facility.

Holders of record as of June 23 may participate in the solicitation.

D.F. King & Co., Inc. is the information and tabulation agent (800 431-9633). The solicitation agent is Goldman Sachs & Co. (212 902-6941 or 800 828-3182).

PetroLogistics is a Houston-based producer of propylene.

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