Rio Vista Energy Partners L.P. Announces Agreement to Sell Its LPG-Related Assets
Tuesday August 16, 6:28 pm ET
HOUSTON--(BUSINESS WIRE)--Aug. 16, 2005--Rio Vista Energy Partners L.P. (NASDAQ:RVEP - News), a supplier of LPG for distribution to Northeast Mexico, announced today that on Aug. 15, 2005, it had entered into a purchase and sale agreement (PSA) with TransMontaigne Product Services Inc. (TransMontaigne), a wholly owned subsidiary of TransMontaigne Inc. (NYSE:TMG - News), which provides for the sale and assignment of all of Rio Vista's LPG assets and refined products tanks including its Brownsville LPG and refined products terminal facility and tank farm and associated leases, owned pipelines located in the United States, including land, leases, and rights of way, LPG inventory, 100 percent of the outstanding stock of its Mexican subsidiaries and affiliate, which in turn, own pipelines and the Matamoros Terminal Facility, including land and rights of way, and assignment of the P.M.I. Trading Limited sales agreement (LPG Asset Sale). The purchase price is $17,400,000 for assets to be sold by Rio Vista. The purchase price may be reduced as provided in the PSA. In connection with the PSA, TransMontaigne agreed to loan Rio Vista $1,300,000. The loan is to be secured by the tank farm and certain LPG storage tanks located at the Brownsville Terminal Facility and is subject to receipt of a consent from RZB Finance LLC and the issuance of an estoppel letter from the Brownsville Navigation District. Rio Vista intends to use the proceeds from the loan to fund certain expenses associated with the PSA and for working capital purposes.
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The closing of the LPG Asset Sale is contingent upon the simultaneous closing of a transaction between TransMontaigne and Penn Octane Corp. (Penn Octane) for the purchase and sale of Penn Octane's LPG-related assets. The closing of the LPG Asset Sale is also subject to several conditions required of Rio Vista and/or Penn Octane, including TransMontaigne's satisfactory completion of its due diligence review (including financial, business, environmental and legal), the approval of Rio Vista's unitholders and Penn Octane's stockholders, assignment of LPG-related contracts, and the modification of LPG-related permits and the related Mexican governmental approvals. The PSA may be terminated by either TransMontaigne or Rio Vista and/or Penn Octane if the closing does not occur by Oct. 31, 2005.
Rio Vista intends to file a proxy statement with the Securities and Exchange Commission in connection with its requirement to obtain approval from Rio Vista's unitholders.
If the LPG Asset Sale is completed, Rio Vista intends to use the proceeds to fund working capital requirements, pursue acquisitions and to resume the minimum quarterly distributions to its unitholders and to pay all arrearages. Rio Vista intends to pursue acquisitions which produce "qualifying income" for U.S. federal tax purposes.
Rio Vista intends to file a copy of the PSA as an exhibit to its June 30, 2005 quarterly report on Form 10-Q, expected to be filed by Friday, Aug. 19, 2005.
About Rio Vista Energy Partners L.P.
Rio Vista Energy Partners L.P. ("Rio Vista") is an energy services master limited partnership that owns or operates Liquefied Petroleum Gas (LPG) assets in Southeast Texas and Northeastern Mexico. The partnership seeks to grow through the acquisition of qualified oil and gas assets. All of Rio Vista's common units were distributed to the stockholders of Penn Octane Corp. ("Penn Octane") (NASDAQ:POCC - News) on Sept. 30, 2004.
Forward-Looking Statements
Certain of the statements in this news release are forward-looking statements, including statements regarding the completion of the proposed LPG Asset Sale, future distributions to unitholders and the possible future acquisition of qualified oil and gas assets. Although these statements reflect Rio Vista's beliefs, they are subject to uncertainties and risks that could cause actual results to differ materially from expectations. The proposed LPG Asset Sale may not be completed if any of the conditions to closing, including satisfactory completion of TransMontaigne's due diligence review, are not satisfied or if various governmental and third party approvals are not obtained. If Rio Vista does not have sufficient capital resources for acquisitions or opportunities for expansion, Rio Vista's growth and its ability to pay quarterly distributions will be limited. Rio Vista did not have sufficient available cash to pay the minimum quarterly distribution to common unitholders otherwise payable in the third quarter of 2005. Rio Vista may be unable to complete future acquisitions of qualified oil and gas assets and, even if completed, such acquisitions may not prove successful. Additional information regarding risks affecting Rio Vista's business may be found in Rio Vista's registration statement on Form 10 and its reports on Form 8-K, Form 10-Q and Form 10-K and Penn Octane's reports on Form 8-K, Form 10-Q and Form 10-K filed with the Securities and Exchange Commission.
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Contact:
Penn Octane Corp.
Charles C. Handly or Ian T. Bothwell, 760-772-9080
or
CEOcast Inc.
Ed Lewis, 212-732-4300
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Source: Rio Vista Energy Partners L.P.
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