Genesis Energy Eliminates IDRs

 

Genesis Energy, L.P. (NYSE:GEL) announced on December 28 that it has permanently eliminated the incentive distribution rights (IDRs) paid to its general partner and converted the 2 percent general partner interest into a non-economic interest. Prior to this restructuring, Genesis' general partner was entitled to receive over 50% of any increase in distributions paid to the common unitholders. As a result of the restructuring, which is effective immediately, the general partner has become by merger one of Genesis' wholly-owned subsidiaries.

The stakeholders of the general partner exchanged their' IDRs for 20 million newly issued common units and 7 million "Waiver units," less approximately 145,000 common units and 50,000 Waiver units which were reserved for a new deferred equity compensation plan for Genesis employees. The Waiver units have the right to convert to common units in four installments in the calendar quarters in which common units receive distributions of at least $0.43, $0.46, $0.49, and $0.52, provided a coverage ratio of at least 1.1 would be maintained.

Click here to see a copy of the press release announcing the restructuring.