USD Partners Announces Forbearance Agreement Under Credit Agreement

USD Partners LP (OTC: USDP) (the “Partnership”) announced today that on June 21, 2024 it entered into an agreement (the “Forbearance Agreement”) with the lenders and administrative agent under its existing Credit Agreement. Pursuant to the Forbearance Agreement, subject to certain terms and conditions, the lenders have agreed to forbear through and until November 1, 2024 (the “Termination Date”), from exercising any rights or remedies arising from certain events of default and certain prospective events of default related to the Partnership’s failure to satisfy certain milestones under the Credit Agreement and other loan documents.

In exchange for agreeing to enter into the Forbearance Agreement, the lenders under the Credit Agreement will require the Partnership to, among other things, complete the sale of the Partnership’s Hardisty Rail Terminal on or before December 30, 2024. The Termination Date may be extended (i) to December 30, 2024, upon satisfaction of certain milestones in the sale process and (ii) to January 31, 2025, in the discretion of the administrative agent. The Forbearance Agreement also obligates the Partnership to adhere to an operating budget approved by the administrative agent and includes an obligation to repay borrowings with any cash on hand in excess of an agreed maximum.

The Hardisty Rail Terminal is underpinned by a long term take-or-pay contract to load DRU volumes with an investment grade customer. The DRU, which is owned jointly by Gibson Energy Inc. and US Development Group, LLC (“USDG”), the owner of the Partnership’s general partner, is not a part of the sale.

About USD Partners LP

USD Partners LP is a fee-based master limited partnership formed in 2014 by USDG to acquire, develop and operate midstream infrastructure and complementary logistics solutions for crude oil, biofuels and other energy-related products. The Partnership generates substantially all of its operating cash flows from multi-year, take-or-pay contracts with primarily investment grade customers, including major integrated oil companies, refiners and marketers. The Partnership’s current operations include railcar loading, storage, and as well as other related logistics services. In addition, the Partnership provides customers with leased railcars and fleet services to facilitate the transportation of liquid hydrocarbons by rail.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of U.S. federal securities laws, including statements with respect to the impact of the Forbearance Agreement, future events relating to our Credit Agreement, including the Partnership’s ability to successfully market and complete the sale of the Hardisty Rail Terminal, and the business prospects of the Partnership and the DRU. Words and phrases such as “plans,” “will,” “could” and similar expressions are used to identify such forward-looking statements. However, the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements relating to the Partnership are based on management’s expectations, estimates and projections about the Partnership, its interests and the energy industry in general on the date this press release was issued. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. Factors that could cause actual results or events to differ materially from those described in the forward-looking statements include those set forth under the heading “Risk Factors” in the Partnership’s financial statements for the year ended December 31, 2023, which are available on the Partnership’s website, and actions by lenders, the Partnership’s ability to successfully market and complete the sale of the Hardisty Rail Terminal in compliance with the Forbearance Agreement, the Partnership’s ability to obtain further forbearance, waivers, amendments, an extension of the maturity date of the Credit Agreement or the Partnership’s ability to repay or refinance borrowings under the Credit Agreement, the impact of the loss of cash flows from the Hardisty Rail Terminal if sold, the tax impact of cancellation of indebtedness income on the Partnership and its unitholders upon completion of such sale, and the potential winding down of the Partnership’s operations and/or dissolution of the Partnership following such sale. Investors are advised to read such “Risk Factors,” together with all information publicly disclosed by the Partnership subsequent thereto, before making an investment decision. The Partnership is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240624018828/en/