Enviva partners, lp announces accretive drop-down transactions and increases guidance business thecourierexpress.com gas youtube


BETHESDA, Md.–(BUSINESS WIRE)–Mar 25, 2019–Enviva Partners, LP (NYSE: EVA) (“Enviva,” the “Partnership,” “we,” “us,” or “our”) today announced that it had agreed to purchase (the “Hamlet Transaction”) the sponsor’s interest in its first development joint venture, Enviva Wilmington Holdings, LLC (the “First JV”). The First JV owns a wood pellet production plant under construction in Hamlet, North Carolina (the “Hamlet plant”) and a firm, 15-year mp electricity bill payment take-or-pay off-take contract (the “MGT contract”) to supply MGT Power Ltd.’s Tees Renewable Energy Plant with nearly one million metric tons per year (“MTPY”) of wood pellets, following a ramp period. In addition, the Partnership announced that it has agreed to make the second and final payment (the “Second Payment”) for its October 2017 acquisition of the deep-water marine terminal in Wilmington, North Carolina (the “Wilmington terminal”) and to commence the associated terminal services agreement to handle contracted volumes from the Hamlet plant (the “Hamlet Throughput”).

As the Partnership expects to complete the Hamlet Transaction before the Hamlet plant achieves COD and the MGT contract reaches full contracted volumes, the sponsor has signed and is expected to deliver at the Closing a make-whole agreement with the Partnership (the “Make-Whole Agreement”) pursuant to which, among other things, the sponsor will (i) guarantee certain cash flows from the Hamlet plant until June 30, 2020 and (ii) reimburse construction cost overruns in excess of budgeted capital expenditures for the Hamlet plant, subject to certain limited exceptions. In addition, in connection with the Closing, the sponsor has signed and is expected to deliver agreements with (a) the First JV, pursuant to which the sponsor will waive certain management services and other fees that otherwise would be owed by the First JV from the Closing until the later of July 1, 2019 and COD and (b) the Partnership, pursuant to which the sponsor will waive certain management services and other fees that otherwise would be owed by the Partnership from the Closing until June 30, 2020 gas prices going up to 5 dollars (collectively, the “MSA Fee Waivers”).

With the benefit of the Hamlet Transaction and the Hamlet Throughput, the Partnership now expects full-year 2019 net income to be in the range of $25.6 million to $33.6 million and adjusted EBITDA to be in the range of $130.0 million to $138.0 million. The Partnership expects to incur maintenance capital expenditures of $6.8 million and interest expense net of amortization of debt issuance costs and original issue discount of $41.9 million, and to benefit from $10.7 million associated with the MSA Fee Waivers in 2019; as a result, the Partnership expects full-year 2019 distributable cash flow to be in the range of $92.0 million to $100.0 million, prior to any distributions attributable to incentive distribution rights paid to our general partner. Similar to previous years, the Partnership expects adjusted EBITDA and distributable cash flow for the second half of 2019 to be significantly higher than for the first half of the year. For full-year 2019, the Partnership now expects to distribute at least $2.65 per common unit. For full-year 2020, the Partnership expects to distribute between $2.87 and $2.97 per common unit.

The guidance amounts provided above, including the distribution expectations, include the benefit of the Hamlet Transaction, the Hamlet Throughput, and the Mid-Atlantic Expansions, and reflect the associated financing activities described above. In addition, the distributable cash flow guidance provided above for 2019 includes the benefit of the MSA Fee Waivers electricity bill calculator. The guidance amounts provided above do not include the impact of any additional acquisitions by the Partnership from the sponsor, its joint ventures, or third parties, or any recoveries related to the previously reported fire incident at the Partnership’s marine export terminal in Chesapeake, Virginia (the “Chesapeake Incident”) and Hurricanes Florence and Michael (the “Hurricane Events”). The Partnership’s quarterly income and cash flow are subject to seasonality and the mix of customer shipments made, which vary from period to period electricity dance moms full episode. When determining the distribution for a quarter, the Board evaluates the Partnership’s distribution coverage ratio on an annual basis and considers the expected distributable cash flow, net of expected amounts attributable to incentive distribution rights, for the next four quarters. On that basis, the Partnership’s targeted annual distribution coverage ratio for the full years of 2019 and 2020 is at least 1.20 times.

Certain statements and information in this press release, including those concerning our future results of operations, acquisition opportunities, and distributions, may constitute “forward-looking statements.” The words “believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could,” or other similar expressions are intended to identify forward-looking statements, which are generally not historical in nature. These forward-looking statements are based on the Partnership’s current expectations and beliefs concerning future developments and their potential effect on the Partnership. Although management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting the Partnership will be those that it anticipates. The forward-looking statements involve significant risks and uncertainties (some of which are beyond the Partnership’s control) and assumptions that could cause actual results to differ materially from the Partnership’s historical experience and its present expectations or projections. Important factors that could cause actual results to differ materially from forward-looking statements include, but are not limited to: (i) the volume and quality of products that we are able to produce or source and sell, which could be adversely affected by, among other things, operating or technical difficulties at our plants or deep-water marine electricity and magnetism purcell pdf terminals; (ii) the prices at which we are able to sell our products; (iii) failure of the Partnership’s customers, vendors, and shipping partners to pay or perform their contractual obligations to the Partnership; (iv) the creditworthiness of our contract counterparties; (v) the amount of low-cost wood fiber that we are able to procure and process, which could be adversely affected by, among other things, disruptions in supply or operating or financial difficulties suffered by our suppliers; (vi) changes in the price and availability of natural gas, coal, or other sources of energy; (vii) changes in prevailing economic conditions; (viii) our inability to complete acquisitions, including acquisitions from our sponsor, or to realize the anticipated benefits of such acquisitions; (ix) inclement or hazardous environmental conditions, including extreme precipitation, temperatures and flooding; (x) fires, explosions or other accidents; (xi) changes in domestic and foreign laws and regulations (or the interpretation thereof) related to renewable or low-carbon energy, the forestry products industry, the international shipping industry, or power generators; (xii) changes in the regulatory treatment of biomass in core and emerging markets; (xiii) our inability to acquire or maintain necessary permits or rights for our production, transportation, or terminaling operations; (xiv) changes in the price and availability of transportation; (xv) changes in foreign currency exchange or interest rates, and the failure of our hedging arrangements to effectively reduce our exposure to the risks related thereto; (xvi) risks related to our indebtedness; (xvii) our failure to maintain effective quality control systems at our production plants and deep-water marine terminals, which could lead to the rejection of our products by our customers; (xviii) changes in the quality specifications for our products that are required by our customers; (xix) labor disputes; (xx) the effects of the anticipated exit of the United Kingdom from the EU on our and our customers’ businesses; (xxi) our inability to hire, train or retain qualified personnel to manage and operate our business and newly acquired assets; (xxii) our inability to borrow funds and access capital markets; (xxiii) our mis-estimation of the timing and extent of our ability electricity sources to recover the costs associated with the Chesapeake Event and the Hurricanes through our insurance policies and other contractual rights; (xxiv) risks related to our project-development activities, and (xxv) our inability to complete our construction projects on time and within budget.