Southcross Energy revealed that the previously signed deal in last October has been terminated as American Midstream Partners could not achieve conditions needed under the merger agreement.
On the other hand, the company’s parent Southcross Holdings has also cancelled its previously signed deal of selling certain of its assets due to a funding failure by American Midstream Partners.
As per the terms of the agreement, Southcross Holdings will be entitled to be paid $17m termination fee. The company said that a part of it will be utilized to reimburse certain of Southcross Energy’s transaction costs.
“Southcross Energy and Southcross Holdings do not anticipate any adverse impacts to our customers, suppliers and employees as a result of the termination of these agreements.
“The combined Boards of Directors of Southcross Energy and Southcross Holdings voted unanimously to approve these actions, which we believe enhance our ability to capitalize on the improving commercial environment across key areas of our asset base,” Southcross Energy said in a statement.
Through the two deals, American Midstream Partners expected to form a partnership with a $3bn enterprise value.
The company, at the time of signing the agreements, said that the transactions will help in expanding its onshore gathering, processing and transmission services in the Eagle Ford shale play and also in the southeast US gas transmission market.
American Midstream Partners was hoping to own and operate about 12,874km of crude, natural gas and NGL pipelines after the closing of the deals.
The proposed transaction also featured ten processing plants with more than 1.0 Bcf/d of capacity and six fractionation facilities having 111,500 Bbl/d of capacity.
Southcross Energy offers natural gas gathering, processing, treating, compression and transportation services and natural gas liquid (NGL) fractionation and transportation services. The company also sources, buys, transports and sells natural gas and NGLs.
