Hiland Partners Suspends Quarterly Distribution on Common and Subordinated Units. Hiland Holdings Suspends Quarterly Distributio
27 Abril 2009 - 6:30PM
PR Newswire (US)
ENID, Okla., April 27 /PRNewswire-FirstCall/ -- The Hiland
companies, Hiland Partners, LP (NASDAQ:HLND) (the "Partnership" or
"HLND") and Hiland Holdings GP, LP (NASDAQ:HPGP) ("Hiland Holdings"
or "HPGP") today suspended quarterly distributions on their
respective outstanding units. Quarterly Distribution Declarations
Hiland Partners, LP The Board of Directors of Hiland Partners GP,
LLC, the general partner of Hiland Partners, LP, today announced
its decision to suspend quarterly distributions on the
Partnership's common and subordinated units beginning with the
first quarter distribution of 2009. The decision to suspend
distributions on the Partnership's common and subordinated units
was based on the Board of Directors' consideration of the impact of
lower commodity prices and drilling activity on the Partnership's
current and projected throughput volumes, midstream segment margins
and cash flows. The Board of Directors also considered future
required levels of capital expenditures and the level of the
Partnership's outstanding indebtedness under its secured revolving
credit facility relative to such projections. Management expects
that the Partnership will be in violation of the maximum
consolidated funded debt to EBITDA ratio contained in the
Partnership's senior secured revolving credit facility at the end
of the second quarter of 2009, unless the ratio is amended, the
Partnership's debt is restructured or the Partnership receives an
infusion of equity capital. Management has initiated discussions
with certain lenders under the credit facility as to potential ways
to address the expected covenant breach. While no potential
solution has been agreed to, the Partnership would expect that any
solution would likely require the infusion of additional equity
capital or the incurrence of subordinated indebtedness by the
Partnership and the suspension of distributions for a certain
period of time. There can be no assurance that any such agreement
will be reached with the lenders or that any required equity or
debt financing will be available to the Partnership. Under the
terms of its partnership agreement, the Partnership's common units
will carry an arrearage for the first quarter's minimum quarterly
distribution of $0.45 per unit that must be paid before the
Partnership can make distributions to its subordinated units. The
Board of Directors will set future distribution rates based on the
amount of cash available for distribution after taking into account
the Partnership's expected liquidity requirements. "The commodity
price environment continues to create a number of challenges," said
Joseph L. Griffin, President and Chief Executive Officer of Hiland.
"In addition to the downward pressure on our midstream segment
margin, the continued decline in natural gas prices has negatively
impacted upstream capital expenditures and related drilling
activity in our service territories, resulting in decreased current
and projected throughput volumes for the Partnership." "The
Partnership will continue to carefully scrutinize distribution and
discretionary capital expenditure decisions given the potential
covenant issues related to the Partnership's secured revolving
credit facility," continued Griffin. Hiland Holdings GP, LP The
Board of Directors of Hiland Partners GP Holdings, LLC, the general
partner of Hiland Holdings GP, LP, today announced its decision to
suspend quarterly distributions on its common units beginning with
the first quarter of 2009. Hiland Holdings sole assets are its two
percent general partner interest, 2,321,471 common units and
3,060,000 subordinated units in Hiland Partners, LP, and the
incentive distribution rights of Hiland Partners, LP. About the
Hiland Companies Hiland Partners, LP is a publicly traded midstream
energy partnership engaged in purchasing, gathering, compressing,
dehydrating, treating, processing and marketing of natural gas, and
fractionating, or separating, and marketing of natural gas liquids,
or NGLs. The Partnership also provides air compression and water
injection services for use in oil and gas secondary recovery
operations. The Partnership's operations are primarily located in
the Mid-Continent and Rocky Mountain regions of the United States.
Hiland Partners, LP's midstream assets consist of fourteen natural
gas gathering systems with approximately 2,011 miles of gathering
pipelines, five natural gas processing plants, seven natural gas
treating facilities and three NGL fractionation facilities. The
Partnership's compression assets consist of two air compression
facilities and a water injection plant. Hiland Holdings GP, LP owns
the two percent general partner interest, 2,321,471 common units
and 3,060,000 subordinated units in Hiland Partners, LP, and the
incentive distribution rights of Hiland Partners, LP. This press
release includes certain statements concerning expectations for the
future that are forward-looking statements. Such forward-looking
statements are subject to a variety of known and unknown risks,
uncertainties, and other factors that are difficult to predict and
many of which are beyond management's control. An extensive list of
factors that can affect future results are discussed in the
Partnership's Annual Report on Form 10-K and other documents filed
from time to time with the Securities and Exchange Commission. Any
such forward looking statements are made as of the date of this
press release and the Partnership undertakes no obligation to
update or revise any such forward-looking statements to reflect new
information or events. DATASOURCE: Hiland Partners, LP; Hiland
Holdings GP, LP CONTACT: Derek Gipson, Director - Business
Development and Investor Relations of Hiland Partners, LP,
+1-580-242-6040 Web Site: http://www.hilandpartners.com/
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