$AZUR: Azure Midstream Partners delays Q4 earnings release and conf call; co said it could exceed the permitted ratio of debt to adj. EBITDA contained in its credit facility as early as the end of Q1 of 2016, evaluating strategic alternatives (2.37 -0.19)
Co announced that it plans to postpone the distribution of its 2015 fourth quarter results and related conference call and webcast, previously scheduled for Thursday, March 10, 2016
Azure is a party to a credit facility, which, as of March 8, 2016, had borrowing capacity of $238.0 mln with total borrowings of $231.7 mln
While Azure expects to be in compliance with all of its financial covenants under its credit facility as of Dec 31, 2015, Azure anticipates that, due to the continuation of adverse industry conditions, it could exceed the permitted ratio of debt to adjusted EBITDA contained in its credit facility as early as the end of Q1 of 2016
Upon any such default under the credit facility, indebtedness under the credit facility could, after the expiration of any grace period and at the election of a majority of the lenders under the credit facility, be accelerated and become immediately due and payable
As a result of this potential default and acceleration, the Partnership's auditors have informed us that its opinion to be issued in connection with the Partnership's consolidated financial statements to be included in the Partnership's annual report on Form 10-K is expected to include an explanatory paragraph to the effect that these conditions raise substantial doubt about the Partnership's ability to continue as a going concern
The Partnership is currently working with its lenders to waive or eliminate the requirement in the credit facility which states that the receipt of a going concern explanatory paragraph is considered an event of default
Likewise, the Partnership continues to pursue options to address the potential covenant violation that may occur as early as the end of the first quarter of 2016
As previously announced, the Partnership continues to pursue options to strengthen its balance sheet. These options include potential equity restructuring, capital raise and strategic alternatives that will provide visibility into stabilizing future distributions and providing excess liquidity to the Partnership
The Board of Directors and management are in the process of evaluating strategic alternatives to help provide the Partnership with financial stability, but no assurance can be given as to the outcome or timing of this process.
