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Westlake Partners acquires more stake in Westlake OpCo
30
Apr '15
NYSE listed Westlake Partners LP said it has acquired 2.7 per cent of additional limited partner interest in Westlake Chemical OpCo LP for approximately $135 million.

“The transaction is expected to be immediately accretive to Westlake Partners' distributable cash flow,” Westlake Chemical Partners said in a press release.

Additionally, Westlake Partners has established a $300 million revolving credit facility (MLP) with a wholly owned subsidiary of Westlake Chemical Corporation to fund acquisitions and for general purposes.

This transaction increases Westlake Partners limited partner interest in Westlake OpCo from approximately 10.6 per cent to around 13.3 per cent.

This also represents the first purchase of additional interests in Westlak OpCo by Westlake Partners following its initial public offering in August 2014.

Westlake OpCo's assets are comprised of three ethylene production facilities, which primarily convert ethane into ethylene and have an aggregate annual capacity of approximately 3.4 billion pounds.

Westlake OpCo sells around 95 per cent of its ethylene production to Westlake Partners under a long-term supply agreement, which provides for a stable $0.10 margin per pound.

Westlake Partners also added that the MLP Revolver entered into will support Westlake Partners ability to pursue additional acquisitions.

The MLP Revolver is a three-year, $300 million revolving credit facility with LIBOR-based interest rates.

"This transaction is the first step to achieve our stated annualised low double-digit growth in distributions,” Westlake Partners CEO, Albert Chao said.

“In conjunction with this transaction, we intend to provide consistent, quarterly increases in distributions targeting annual distribution growth in the low double-digit percentage range," he added.

According to Chao, acquiring additional interest in OpCo provides a high-quality, stable and a fee-based earnings stream and represents just one of a number of levers it can use to grow its distributions over time.

Westlake Partners also hopes to pursue organic growth opportunities such as capacity expansions in OpCo's ethylene production facilities and acquisitions of other qualified assets from third parties.

It is currently executing its previously announced capacity expansion project at one of OpCo's ethylene crackers in Lake Charles, Louisiana.

This expansion is expected to increase OpCo's ethylene production capacity by approximately 250 million pounds once completed during the first half of 2016. (AR)

Fibre2fashion News Desk - India


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