Sanchez Production Partners LP (NYSE MKT: SPP) intends to implement a 1-for-10 reverse split on its common units, effective after the market closes on Aug. 3.
“Since the summer of 2013, we have worked diligently to better position SPP for future growth by initiating a business development relationship with a committed sponsor, executing management service and related agreements, transitioning employees to Sanchez Oil & Gas Corp., converting SPP to a limited partnership, and executing our first transaction with Sanchez Energy Corp.,” said Gerald F. Willinger, interim CEO of the general partner of SPP. “With a solid foundation for SPP built, we are now ready to implement the next set of measures necessary for growth. As we look to expand the Partnership’s asset base by pursuing a larger-scale transaction with a view toward resuming distributions in 2015, we are focused on increased visibility and the deliberate expansion of our unitholder base by attracting institutional investors. The reverse split is supportive of these goals, and represents an important component of our overall strategic plan.”
Pursuant to the reverse split, common unitholders will receive one common unit for every 10 common units they own at the close of trading on Aug. 3. All fractional units created by the reverse split will be rounded to the nearest whole unit. If the fraction created is less than one-half, it will be rounded down to the nearest whole unit. If the fraction is one-half or more, it will be rounded up to the nearest whole unit. Each unitholder will get at least one unit.
The Partnership anticipates that the reverse split will decrease the number of common units outstanding from approximately 31.5 million to 3.1 million.
The Partnership's transfer agent, ComputerShare Investor Services, will adjust its records to reflect each unitholder's post-split position. Unit adjustments to physical unit certificates can be made upon surrender of the certificate to the transfer agent.
A new CUSIP number for the common units will be issued and announced in connection with the reverse split, and the Partnership’s common units will continue to trade under the symbol “SPP” on NYSE MKT.