Hess Midstream Subsidiary to Buy Back $100MM of Class B Units
Hess Midstream LP subsidiary Hess Midstream Operations LP is repurchasing approximately $100 million worth of Class B units held by affiliates of Hess Corp. and Global Infrastructure Partners, according to a March 12 press release.
Hess Midstream Operations will repurchase approximately 2 million Class B units equal to 1.2% of the consolidated company. Upon the closing of this repurchase transaction, the public will own approximately 35.4% of Hess Midstream, Global Infrastructure Partners will own 26.8% and Hess Corp. 37.8%, on a consolidated basis.
“We continue to execute unit repurchase transactions as part of our unique and differentiated financial strategy, which prioritizes shareholder returns and a strong balance sheet,” said Jonathan Stein, CFO of Hess Midstream.
Hess Midstream has returned $1.65 billion to shareholders through ongoing unit repurchases, which reduced the company’s total unit count by over 20%, Stein said. The current unit repurchase is expected to bring more than $1.25 billion of financial flexibility through 2026, which the company plans to use for further repurchases, the midstream company said.
According to the terms of the repurchase agreement, the repurchased units will be cancelled upon closing of the transaction. Hess Midstream expects the cancelled units to increase distributable cash flow per Class A share, increasing incremental distribution growth capacity over Hess Midstream’s annual distribution target of at least 5% through 2026.
