MarathonPetroleum Corp. and MPLX LP on April 1 announced the closing of Marathon'sdropdown of its inland marinebusiness to MPLX, effective March 31.
As payment for the assets, MPLX is issuing $600 millionworth of equity to Marathon, priced at about $26.09 per unit. Some 98% of theequity is in common units, with the rest in general partner units, according tothe news release.
Also, Marathon has agreed to waive first-quarter 2016 commonunit distributions, incentive distribution rights and general partnerdistributions for the newly issued common units.
The business, which make up almost 60% of Marathon's totalvolumes by inland marine vessels, include 18 tow boats and 205 barges thatcarry light products, heavy oils, crude oil, renewable fuels, chemicals andfeedstocks in the Midwest and Gulf Coast regions.
"The high-quality inland marine assets arestrategically located in key markets," said Gary Heminger, chairman andCEO of MPLX. "The addition of this business to the partnership under afee-for-capacity contract with MPC adds approximately $120 million of annualEBITDA, providing a highly predictable income and cash-flow stream that furtherdiversifies the earnings mix for MPLX."