HOUSTON - Genesis Energy, L.P. (NYSE: GEL), a midstream energy company with a market capitalization of $1.39 billion, has initiated a public offering of $400 million in senior notes due 2033, in collaboration with its subsidiary, Genesis Energy Finance Corporation. The offering, which is subject to market and other conditions, includes a guarantee from all of Genesis Energy's subsidiaries except for its unrestricted subsidiaries.
The proceeds from this offering are earmarked for two primary purposes. Firstly, Genesis Energy plans to utilize the net proceeds to purchase or redeem up to $385 million of its outstanding 8.0% senior notes due 2027. Secondly, the remaining funds will be allocated for general partnership purposes, such as repaying a portion of the revolving borrowings under the company's senior secured credit facility. According to InvestingPro data, the company operates with a significant debt burden, carrying total debt of $4.02 billion as of the latest quarter.
Wells Fargo (NYSE:WFC) Securities, LLC is spearheading the offering, assisted by several joint book-running managers and co-managers. Interested parties can obtain a copy of the preliminary prospectus supplement and the accompanying base prospectus from Wells Fargo Securities, or by visiting the SEC's website once the documents become available.
The offering is being made through the prospectus supplement and the base prospectus, which are part of Genesis Energy's effective shelf registration statement previously filed with the Securities and Exchange Commission. It's important to note that this press release does not serve as an offer to sell or a solicitation of an offer to buy any securities, nor does it constitute a notice of redemption under the indenture governing the 8.0% senior notes due 2027.
Genesis Energy is a diversified midstream energy master limited partnership with operations that include offshore pipeline transportation, soda and sulfur services, marine transportation, and onshore facilities and transportation. The company is based in Houston, Texas, with operations primarily in the Gulf Coast region, Wyoming, and the Gulf of Mexico. With an EBITDA of $550 million in the last twelve months and a notable track record of maintaining dividend payments for 28 consecutive years, the company currently trades near its InvestingPro Fair Value. Investors seeking deeper insights into Genesis Energy's financial health and growth prospects can access comprehensive analysis through InvestingPro's detailed research reports, available for over 1,400 US stocks.
The press release contains forward-looking statements and while Genesis Energy believes its expectations are based on reasonable assumptions, there is no guarantee that its goals will be achieved. The company expressly states that actual results may differ materially and that it is under no obligation to update or revise any forward-looking statements publicly.
This news article is based on a press release statement from Genesis Energy, L.P.
In other recent news, Genesis Energy LP (NYSE:GEL) announced the impending retirement of its Chief Administrative Officer, Robert V. Deere (NYSE:DE), effective December 31, 2024. Deere has served the company since October 2008, transitioning from Chief Financial Officer to Chief Administrative Officer in April 2023. The company has yet to name an immediate successor for the key role.
In financial updates, Genesis Energy has acknowledged current challenges in its Offshore and Soda and Sulfur Services segments, including technical issues and production difficulties. Despite these hurdles, the company remains optimistic, implementing cost-cutting measures and projecting operational cash flow improvements by late 2025. The Shenandoah and Salamanca offshore projects are progressing as planned, and the marine transportation segment is demonstrating high utilization rates.
However, the company estimates its 2024 adjusted EBITDA to be below previous guidance, and the total debt to EBITDA ratio may temporarily exceed five times. Despite production challenges and increased maintenance costs in the Soda and Sulfur Services segment, Genesis Energy expects the soda ash market to balance and prices to rise as high-cost producers curtail output. These are among the recent developments within the company.
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