Southcross Energy Partners LP (NYSE: SXE) (Southcross) and Southcross Holdings LP (Holdings) have secured a new $175 million equity commitment and have provided additional detail into distribution coverage and future drop-down plans.
Charlesbank Capital Partners, EIG Global Energy Partners, and Tailwater Capital (collectively, the sponsors) provided a new $175 million equity commitment to enhance liquidity and support anticipated growth initiatives for Southcross and Holdings.
Of the total, $50 million is committed to Southcross and will be funded as needed to pursue significant growth opportunities that currently exist in the Eagle Ford shale play, including both accretive organic capital projects and strategic acquisitions. The new capital is also available for potential future covenant cures and asset drop-downs from Holdings. The capital is expected to be structured to minimize any potential dilution of existing common unit holders.
The remaining $125 million will be directed to Holdings and utilized to enhance the inventory of drop-down assets available to Southcross. Holdings owns 100% of Southcross Energy Partners GP LLC, the general partner of Southcross, limited partner interests in Southcross, and several key Eagle Ford midstream assets. The capital that is committed to Holdings is also available for direct investment in Southcross for future growth projects.