Southcross Energy Partners LP, which filed for Chapter 11 bankruptcy protection, is selling certain natural gas pipeline networks in Alabama and Mississippi for $31.5 million in cash.
The partnership, its general partner Southcross Energy Partners GP LLC and its subsidiaries agreed to sell the pipeline networks and related assets to Magnolia Infrastructure Holdings LLC. The U.S. Bankruptcy Court for the District of Delaware approved the transaction Aug. 30, according to a Sept. 17 SEC filing.
To fund the deal, Magnolia signed an equity commitment letter with its parent, ArcLight Energy Partners Fund V LP, under which the private equity firm will provide roughly $28.4 million in equity financing to Magnolia.
Southcross will provide transition services to Magnolia for up to 90 days after the transaction is closed, which could be extended by 60 days at the latter's request.
Dallas-based Southcross is engaged in gas gathering, processing and transportation as well as NGL fractionation and transportation. In filing the voluntary petition for Chapter 11 restructuring, Chairman, President and CEO James Swent III cited the partnership's "heavier debt burden" compared to competitors in an unfavorable market environment.
Southcross earlier struck an agreement to sell the Corpus Christi pipeline, Bay City lateral networks and related assets to a Kinder Morgan Inc. subsidiary for $76 million in cash.
