Ferrellgas Partners LP cuts distribution by 80%
Ferrellgas Partners LP (FGP) will lower its quarterly distribution from $0.5125 to $0.10 per unit.
The distribution is payable on December 15, 2016 to common unitholders of record as of December 8, 2016.
The distribution covers the period from August 1, 2016, to October 31, 2016, the Company’s first quarter of fiscal 2017.
If this distribution level is maintained throughout fiscal 2017, compared to the previous distribution level of $0.5125 per quarter ($2.05 annualized), it will provide approximately $160 million of internally generated capital on an annualized basis to provide increased liquidity, reduce leverage and strengthen the Company’s balance sheet. The Board of Directors will continue to monitor and evaluate the distribution level each quarter.
As previously disclosed the Company has experienced headwinds in our midstream business primarily due to the loss of our largest customer as well as general market conditions. We have also experienced a significantly warmer than normal start to the winter propane season. As a result, the Board of Directors believes it is prudent to strengthen our balance sheet by reducing indebtedness and operating expenses.
“We are confident these actions support the long-term interests of our unitholders, employees, and other stakeholders,” said James E. Ferrell, Chairman and interim President and Chief Executive Officer. “There are encouraging signs throughout all business segments. We are focused on organic customer growth and asset utilization in an effort to improve cash flow that will in turn contribute to the improvement of our leverage ratios.”
Source: Ferrellgas Partners, L.P.
The distribution is payable on December 15, 2016 to common unitholders of record as of December 8, 2016.
The distribution covers the period from August 1, 2016, to October 31, 2016, the Company’s first quarter of fiscal 2017.
If this distribution level is maintained throughout fiscal 2017, compared to the previous distribution level of $0.5125 per quarter ($2.05 annualized), it will provide approximately $160 million of internally generated capital on an annualized basis to provide increased liquidity, reduce leverage and strengthen the Company’s balance sheet. The Board of Directors will continue to monitor and evaluate the distribution level each quarter.
As previously disclosed the Company has experienced headwinds in our midstream business primarily due to the loss of our largest customer as well as general market conditions. We have also experienced a significantly warmer than normal start to the winter propane season. As a result, the Board of Directors believes it is prudent to strengthen our balance sheet by reducing indebtedness and operating expenses.
“We are confident these actions support the long-term interests of our unitholders, employees, and other stakeholders,” said James E. Ferrell, Chairman and interim President and Chief Executive Officer. “There are encouraging signs throughout all business segments. We are focused on organic customer growth and asset utilization in an effort to improve cash flow that will in turn contribute to the improvement of our leverage ratios.”
Source: Ferrellgas Partners, L.P.
