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TransMontaigne, Inc. (TMG) Message Board

  • suejenseth suejenseth Feb 12, 2005 6:02 AM Flag

    question about creation of mlp

    If you purchase shares of TMG now and it creates an MLP structure.

    I assume you are a shareholder of the GP, do you get any mlp shares on the spin or do you have to purchase the shares in the open market?

    Thanks in advance, hope this is not a dumb question.

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    • It is my opinion that, as stlbeerman has also mentioned, TMG will most likely sell a portion of the MLP to the public while retaining a majority of it. My guesstimate has been that TMG will retain perhaps as much as 75% of the MLP and sell only enough into the public to get a good valuation and raise enough cash to pay off a large majority of the debt. They have a lot of cash coming in from the sale of the 2.5-3.5 million barrels of oil, coupled with the money they will get from Morgan Stanley via the warrants, along with the cash on hand, they will not needs to sell more than say 25% of the MLP which means that they can retain a large portion of it and use the distributions from the units they retain to fund a dividend at the corporate level(GP). I suspect that .30 to .40 a share is possible.

    • Not a dumb question. My belief is "no". They need to do the MLP to raise money to pay off the debt. If they gave the MLP shares to you, they would not be raising much money, would they?