Tortoise Capital Resources Corp. Announces Portfolio Company High Sierra Energy to Merge with NGL Energy Partners, LP
LEAWOOD, Kan.--(BUSINESS WIRE)-- Tortoise Capital Resources Corp. (NYSE: TTO) today announced that NGL Energy Partners, LP (NYSE: NGL) entered into a merger agreement with TTOs largest portfolio company, High Sierra Energy, LP and its affiliates (HS). The merger is subject to various closing conditions and is expected to close in early June 2012.
TTO owns both HS Limited Partnership and General Partnership interests and expects to receive for both, in the aggregate, $9.2 million in cash and approximately 1.2 million units of NGL at the close. The units of NGL to be received will not be subject to a lock-up agreement, however they will only be tradable pursuant to Rule 144. Assuming a value for the publicly traded NGL shares of $21.50, the total consideration received by TTO would be approximately $35.3 million, compared to the fair value as of Feb. 29, 2012 of $29.1 million, adding approximately $0.40 per share of book value (assuming no other changes since that date).
The management team at High Sierra has done a terrific job, and we believe NGL is a great partner to continue to build out its midstream strategy, said TTO President, Ed Russell.
TTO continues to believe that its investments, including the units of NGL received as consideration, should support a sustainable annualized distribution of not less than $0.44 per share or $0.11 per share, per quarter.
The merger of HS enables TTO to continue pursuing its strategy of providing lease-based financing for pipeline, storage and power transmission assets. The High Sierra merger provides potential liquidity for a significant private holding in the portfolio, said TTO CEO, David Schulte. The cash plus the potential future proceeds from the sale of NGL units provide additional sources of funding for TTOs strategy. After the merger, we also expect TTO to have debt and equity capital market access.
About Tortoise Capital Resources Corp.
Tortoise Capital Resources Corp. (NYSE: TTO) is an energy infrastructure asset financing company that provides capital to pipeline, storage and power transmission operators. TTO's investment portfolio includes companies and real assets with long-term, stable cash flows, limited commodity price sensitivity, and growth opportunities. TTO is managed by Corridor InfraTrust Management, LLC. Corridor is an affiliate of Tortoise Capital Advisors, L.L.C., an investment manager specializing in listed energy infrastructure investments with approximately $8.0 billion of assets under management as of April 30, 2012. For more information, visit Corridor's website at www.corridortrust.com.
Safe Harbor Statement
This press release shall not constitute an offer to sell or a solicitation to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer or solicitation or sale would be unlawful prior to registration or qualification under the laws of such state or jurisdiction.
This press release contains certain statements that may include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, included herein are "forward-looking statements." Although the company and Corridor InfraTrust Management, LLC believe that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the company's reports that are filed with the Securities and Exchange Commission. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Other than as required by law, the company and Corridor InfraTrust Management, LLC do not assume a duty to update this forward-looking statement. Any distribution paid in the future to our stockholders will depend on the actual performance of the company, its costs of leverage and other operating expenses and will be subject to the approval of the company's Board and compliance with leverage covenants.
Tortoise Capital Advisors, L.L.C.
Pam Kearney, 866-362-9331
Source: Tortoise Capital Resources Corporation (TTO)Copyright Business Wire 2012