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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (Date of earliest event reported): DECEMBER 1, 1999
PLAINS ALL AMERICAN PIPELINE, L.P.
(Exact name of registrant as specified in charter)
DELAWARE 0-9808 13-2898764
(State of Incorporation) (Commission File No.) (I.R.S. Employer
Identification No.)
500 DALLAS STREET, SUITE 700
HOUSTON, TEXAS 77002 77002
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (713) 654-1414
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ITEM 5. OTHER EVENTS.
December 1, 1999 News Release
On December 1, 1999, Plains All American Pipeline, L.P. and Plains
Resources Inc., the parent of the general partner of Plains All American,
announced that Plains All American had reached tentative agreement with its
lenders on a new credit facility which would provide for, among other matters,
(i) an aggregate letter of credit availability with a minimum of $300 million
(ii) the lenders' waiver of the defaults under certain covenants in Plains All
American's credit facilities resulting from Plains All American's recently
announced unauthorized trading losses of approximately $160 million, and (iii)
the requirement that the consent of the lenders must be obtained for any
distribution on Plains All American's outstanding common units.
It was also announced that Plains All American had committed to its lenders
to raise an additional $50 million within the next 30 days. Plains Resources
had reached tentative agreement with two of its existing equity holders for the
$50 million infusion of additional funds into Plains All American through the
issuance of a new series of 10% convertible preferred stock by Plains Resources.
The infusion of the proceeds into Plains All American will require the approval
of certain of Plains Resources' lenders. In addition, Plains Resources had
agreed to provide debt financing to Plains All American in the amount of
approximately $64 million, under the tentative agreement with Plains All
American's lenders.
December 2, 1999 News Release
On December 2, 1999, Plains All American and Plains Resources announced
that Plains All American had executed definitive agreements for its previously
announced $300 million credit facility. The facility is available for
the issuance of letters of credit in conjunction with Plains All American's
normal business operations. The lenders had also agreed to waive the defaults
under certain covenants contained in Plains All American's credit facilities.
The defaults and unanticipated credit requirements resulted from the recently
announced unauthorized trading losses of approximately $160 million. In
addition, the credit facilities were modified to eliminate or mitigate through
April 30, 2000, the adverse impact of the losses on Plains All American's
financial covenants.
Plains All American's revised credit facility provides for aggregate letter
of credit availability ranging up to $301 million, with sublimits for cash
ranging up to $40 million. In connection with such credit facility, Plains
Resources had agreed to provide debt financing to Plains All American in the
amount of approximately $114 million. A wholly owned subsidiary of Plains
Resources Inc. is the general partner of Plains All American and owns
approximately 54% of its outstanding limited partnership interests.
Under the terms of Plains All American's revised credit facility, the
consent of its lenders must be obtained for any distribution on its outstanding
common units.
Interest on amounts outstanding under the revised credit facility is
LIBOR + 225 basis points. Its terms include monitoring by independent
accountants of the Plains All American's letter of credit position for the next
120 days and certain other conditions.
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It was also announced that the tentative agreement of two of Plains
Resources' existing equity holders to purchase up to $50 million of a new series
of 10% convertible preferred stock to be issued by Plains Resources had been
advanced to an executed commitment letter. Proceeds from this issuance are
required to be used to provide working capital for Plains All American and would
constitute a portion of the $114 million in debt financing which Plains
Resources has agreed to provide to Plains All American . The letter agreement
requires that at least $25 million of the commitment be drawn prior to December
31, 1999. The balance of the commitment expires January 10, 2000. The preferred
issuance will carry a 10% coupon, is convertible into Plains Resources' common
stock by the holder at any time at a conversion rate of $12.25 per common share
and is redeemable at the option of Plains Resources at declining premiums
beginning in 2005.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
99.1 - News Release of Plains All American Pipeline, L.P. and Plains
Resources Inc. dated December 1, 1999, announcing that Plains
All American had reached a tentative agreement with its lenders
and that Plains Resources had reached tentative agreement with
two existing equity owners for a $50 million capital infusion of
additional funds into Plains All American from the proceeds of
the sale of a new series of Plains Resources' preferred stock.
99.2 - News release of Plains All American Pipeline, L.P. and Plains
Resources Inc. dated December 2, 1999, announcing that Plains
All American had executed definitive agreements for its
previously announced credit facility and Plains Resources Inc.
had executed commitment letters with two existing equity holders
for the sale of up to $50 million of a new series of preferred
stock, the proceeds of which will be used to provide working
capital to Plains All American.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Plains
Resources Inc. has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: December 6, 1999
PLAINS ALL AMERICAN PIPELINE, L.P.
By: PLAINS ALL AMERICAN, INC., its General Partner
By: /s/ Michael R. Patterson
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Name: Michael R. Patterson
Title: Senior Vice President
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INDEX TO EXHIBITS
Number Exhibit
- ------ -------
99.1 News Release of Plains All American Pipeline, L.P. and Plains
Resources Inc. dated December 1, 1999, announcing that Plains All
American had reached a tentative agreement with its lenders and that
Plains Resources had reached tentative agreement with two
existing equity owners for a $50 million capital infusion of additional
funds into Plains All American from the proceeds of the sale of a new
series of Plains Resources' preferred stock.
99.2 News release of Plains All American Pipeline, L.P. and Plains
Resources Inc. dated December 2, 1999, announcing that Plains All
American had executed definitive agreements for its previously
announced credit facility and Plains Resources Inc. had executed
commitment letters with two existing equity holders for the sale of up
to $50 million of a new series of preferred stock, the proceeds of
which will be used to provide working capital to Plains All American.
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EXHIBIT 99.1
CONTACTS: PHILLIP D. KRAMER HARRY N. PEFANIS
EXECUTIVE VICE PRESIDENT AND CFO PRESIDENT AND COO
713/654-1414 OR 800/934-6083 713/646-4242 OR 800/392-3676
FOR IMMEDIATE RELEASE
PLAINS ALL AMERICAN PIPELINE, L.P. ANNOUNCES
TENTATIVE AGREEMENT WITH LENDERS
(Houston - December 1, 1999) Plains All American Pipeline, L.P. (NYSE:PAA) and
Plains Resources Inc. (AMEX:PLX), the parent of the general partner of Plains
All American, announced today that Plains All American has reached tentative
agreement with its lenders on a new credit facility which would provide for
aggregate letter of credit availability with a minimum of $300 million. Subject
to finalization of the necessary documents, Plains All American would be in a
position within 24 hours to issue letters of credit in conjunction with its
normal business operations.
Plains All American has committed to its lenders to raise an additional $50
million within the next 30 days. Plains Resources has reached tentative
agreement with two of its existing equity holders for the $50 million infusion
of additional funds into Plains All American through the issuance of a new
series of 10% convertible preferred stock by Plains Resources. The new preferred
issuance is also subject to documentation, and the infusion of the proceeds into
Plains All American will require the approval of certain of Plains Resources'
lenders. In addition, Plains Resources has agreed to provide debt financing to
Plains All American in the amount of approximately $64 million, under the
tentative accord with the lenders.
Under the terms of the tentative credit facility, the lenders would agree
to waive the defaults under certain covenants contained in Plains All American's
credit facilities. The defaults resulted from Plains All American's recently
announced unauthorized trading losses of approximately $160 million. The consent
of the lenders must be obtained for any distribution on the outstanding common
units, under the tentative agreement with lenders.
"We are gratified by the support of our lenders and trading partners in
addressing the challenge of dealing with this unexpected and difficult problem",
said Greg L. Armstrong, Chairman and CEO of Plains All American's general
partner. "We are determined to put this problem behind us."
--MORE--
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Except for the historical information contained herein, the matters
discussed in this news release are forward-looking statements that involve
certain risks and uncertainties. These risks and uncertainties include, among
other things, demand for various grades of crude oil and resulting changes in
pricing conditions, availability of third party production volumes for
transportation and marketing, regulatory changes, the availability of
acquisition opportunities on terms favorable to Plains All American, the
availability to Plains All American of credit on satisfactory terms, and other
factors and uncertainties inherent in the marketing, transportation,
terminalling, gathering and storage of crude oil discussed in Plains All
American's filings with the Securities and Exchange Commission.
Plains All American Pipeline, L.P. is engaged in interstate and intrastate
crude oil transportation, terminalling and storage, as well as crude oil
gathering and marketing activities, primarily in California, Texas, Oklahoma,
Louisiana and the Gulf of Mexico. Plains All American Inc., a wholly owned
subsidiary of Plains Resources Inc., holds an effective 54% interest in Plains
All American and serves as its general partner. Plains All American's common
units are traded on the New York Stock Exchange under the symbol "PAA". Plains
Resources Inc.'s common shares are traded on the American Stock Exchange under
the symbol "PLX". Plains All American is headquartered in Houston, Texas.
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EXHIBIT 99.2
CONTACTS: PHILLIP D. KRAMER HARRY N. PEFANIS
EXECUTIVE VICE PRESIDENT AND CFO PRESIDENT AND COO
713/654-1414 OR 800/934-6083 713/646-4242 OR 800/392-3676
FOR IMMEDIATE RELEASE
PLAINS ALL AMERICAN PIPELINE, L.P. ANNOUNCES
DEFINITIVE AGREEMENT WITH LENDERS
(Houston - December 2, 1999) Plains All American Pipeline, L.P.
(NYSE:PAA) and Plains Resources Inc. (AMEX:PLX), the parent of the general
partner of Plains All American, announced today that Plains All American has
executed definitive agreements for its previously announced $300 million credit
facility. The facility is currently available for the issuance of letters of
credit in conjunction with Plains All American's normal business operations. The
lenders have also agreed to waive the defaults under certain covenants contained
in Plains All American's credit facilities. The defaults and unanticipated
credit requirements resulted from the recently announced unauthorized trading
losses of approximately $160 million. In addition, the credit facilities were
modified to eliminate or mitigate through April 30, 2000, the adverse impact of
the losses on Plains All American's financial covenants.
"We are gratified by the speed with which we were able to move to
final documentation" said Greg L. Armstrong, Chairman and CEO of Plains All
American's general partner. "Finalizing the terms of this facility represents
another positive step in putting this problem behind us."
Plains All American's revised credit facility provides for aggregate
letter of credit availability ranging up to $301 million, with sublimits for
cash ranging up to $40 million. In connection with such credit facility, Plains
Resources Inc. has agreed to provide debt financing to the Company in the amount
of approximately $114 million. A wholly owned subsidiary of Plains Resources is
the general partner of the Company and owns approximately 54% of its outstanding
limited partnership interests.
Under the terms of Plains All American's revised credit facility, the
consent of the lenders must be obtained for any distribution on the outstanding
common units.
Interest on amounts outstanding under the revised credit facility is
LIBOR + 225 basis points. Its terms include monitoring by independent
accountants of the Company's letter of credit position for the next 120 days and
certain other conditions.
--MORE--
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PAGE 2
In a related development, the tentative agreement of two of Plains
Resource's existing equity holders to purchase up to $50 million of a new series
of 10% convertible preferred stock to be issued by Plains Resources has been
advanced to an executed commitment letter. Proceeds from this issuance are
required to be used to provide working capital for Plains All American and would
constitute a portion of the $114 million in debt financing which Plains
Resources has agreed to provide to the partnership. The letter agreement
requires that at least $25 million of the commitment be drawn prior to December
31, 1999. The balance of the commitment expires January 10, 2000. The preferred
issuance will carry a 10% coupon, is convertible into Plains Resources' common
stock by the holder at any time at a conversion rate of $12.25 per common share
and is redeemable at the option of Plains Resources at declining premiums
beginning in 2005.
Except for the historical information contained herein, the matters
discussed in this news release are forward-looking statements that involve
certain risks and uncertainties. These risks and uncertainties include, among
other things, demand for various grades of crude oil and resulting changes in
pricing conditions, availability of third party production volumes for
transportation and marketing, regulatory changes, the availability of
acquisition opportunities on terms favorable to Plains All American, the
availability to Plains All American of credit on satisfactory terms, and other
factors and uncertainties inherent in the marketing, transportation,
terminalling, gathering and storage of crude oil discussed in Plains All
American's filings with the Securities and Exchange Commission.
Plains All American Pipeline, L.P. is engaged in interstate and
intrastate crude oil transportation, terminalling and storage, as well as crude
oil gathering and marketing activities, primarily in California, Texas,
Oklahoma, Louisiana and the Gulf of Mexico. Plains All American Inc., a wholly
owned subsidiary of Plains Resources Inc., holds an effective 54% interest in
Plains All American and serves as its general partner. Plains All American's
common units are traded on the New York Stock Exchange under the symbol "PAA".
Plains Resources Inc.'s common shares are traded on the American Stock Exchange
under the symbol "PLX". Plains All American is headquartered in Houston, Texas.
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