Azure Midstream to tap credit facility to fund drop-down acquisition

By Wendy Van Sickle

Columbus, Ohio, Aug. 6 – Azure Midstream Partners, LP will draw $80 million from its existing credit facility to fund most of its drop-down acquisition of the equity interests of Azure ETG, LLC, according to a press release.

The acquisition, which includes natural gas pipelines in Nacogdoches and Shelby Counties of Texas, is expected to close soon at a total purchase price of $83 million. The additional $3 million will come from 255,319 common units in the partnership to be issued in payment.

Azure Midstream Energy, LLC will use the $80 million in cash to be received from the dropdown to reduce debt and to create financial flexibility to fund future development opportunities.

In January 2015, Azure Midstream Energy, owner of 100% of the general partner of Azure Midstream Partners, committed to reducing indebtedness by $195 million to $250 million, according to the release. With the drop down of Azure ETG, the 2015 debt reduction target will be met.

Based in Dallas, Azure Midstream Partners was formed to develop, own, operate and acquire midstream energy assets.

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