Flint Hills fails to get needed consents to amend PetroLogistics notes

By Susanna Moon

Chicago, July 24 – Flint Hills Resources Houston Chemical, LLC said it failed to secure the needed consents to amend the 6¼% senior notes due 2020 issued by PetroLogistics LP and PetroLogistics Finance Corp.

The consent solicitation ended at 5 p.m. ET on July 23, extended from July 9 and, before that, from July 8 and July 2.

As previously announced, PetroLogistics began the consent solicitation at the request of Flint Hills Resources, LLC, a subsidiary of Koch Industries, Inc. The solicitation was in connection with Flint Hills’ acquisition of PetroLogistics.

The consent solicitation began on June 24.

The companies solicited 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.

More solicitation details

PetroLogistics said on July 7 that the consent payment was amended to provide that Flint Hills Resources, LLC would pay $1,825,000 in cash to holders who delivered consents by the end of the solicitation.

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

The consent solicitation also was amended to provide that 100% of the pro rata consent amount would be paid promptly after the solicitation ends if the issuers had received consents for a majority of the outstanding notes voting as a single class.

The company previously said that Flint Hills would 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.

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).

Flint Hills Resources Houston Chemical, formerly known as PL Propylene and successor by merger to PetroLogistics, is a major producer of propylene with operations in Houston.

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