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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 27, 1999
TRANSMONTAIGNE INC.
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(Exact Name of Registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
Commission File Number 001-11763
IRS Employer No. 06-1052062
370 Seventeenth Street
Suite 2750
Denver, CO 80202
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(Address, including zip code of principal executive offices)
303-626-8200
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(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
On December 27, 1999, TransMontaigne Inc. issued the press release attached
hereto as Exhibit 99.1.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
Exhibit No. Description
99.1 Press Release dated December 27, 1999
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TransMontaigne Inc.,
By: /s/ Harold R. Logan, Jr.
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Harold R. Logan, Jr.
Executive Vice President
January 5, 2000
2
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EXHIBIT 99.1
Contact: Donald H. Anderson, Vice-Chairman
Harold R. Logan, Jr. - Executive Vice President/Finance
303-626-8200
27 December 1999 Release after the close
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Denver, Colorado - TransMontaigne Inc. ("TransMontaigne") (ASE:TMG) today
announced the signing of a definitive agreement to sell its natural gas
gathering subsidiary, Bear Paw Energy Inc., (BPEI), to BPE Acquisition LLC, a
special purpose entity formed by Bear Paw's Management in association with
Thomas J. Edelman and Chase Capital Partners ("CCP"). The sale of BPEI is for
cash consideration of $107.5 million, plus retroactive reimbursement for all of
the capital expenditures made by TransMontaigne on "BPEI"s newly constructed
Powder River coal seam gathering system from July 1, 1999 to December 31, 1999.
The transaction, expected to close in mid January of 2000, will be effective
December 31, 1999 and is subject to receipt of customary consents and applicable
regulatory approvals. The net proceeds, estimated at approximately $130 million,
will be used primarily to reduce TransMontaigne's current indebtedness.
The estimated gain realized by the sale, if recognized in the 2nd fiscal quarter
ending December 31, 1999, will mitigate, but not eliminate, the losses that
TransMontaigne is currently experiencing in its core business, petroleum
products logistical services. That business segment has been experiencing losses
related to the cost of fully hedging its significant petroleum products
inventory, currently some 6,000,000 barrels of gasoline and distillate, and
trading and location differential losses due to unanticipated strength in crude
oil versus heating oil prices. The crude oil and petroleum products futures
markets remain significantly backwardated with the prompt month strength
distorting the normal winter/summer value relationships of heating oil and
gasoline products.
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The current "inverse" market structure is severely penalizing those service-
oriented companies, like TransMontaigne, which are required to hold petroleum
products needed to operate terminal and pipeline facilities and meet customer
demand, versus a structure which rewards the holding of inventory by pricing
carrying value into the forward price curve. In response to the unprecedented
severity and duration of this current market structure, TransMontaigne has
undertaken and continues a number of steps including: (1) an aggressive program
to lower its overall petroleum products inventory thus reducing the related
hedging costs, without impacting the "just in time" delivery services provided
to its customers; (2) a review of its current strategy, adopted in November 1998
with the acquisition of Louis Dreyfus Energy Corporation, of fully hedging all
petroleum product inventories, including those minimum quantities not held for
resale; and (3) a re-evaluation and modification of the pricing structure of
certain supply, distribution and marketing services it provides. The cash
generated by this ongoing inventory minimization will also be used to reduce the
Company's bank indebtedness.
TransMontaigne offers a broad range of logistically integrated transportation,
storage, terminaling, supply, exchange, distribution, and marketing services to
refiners, manufacturers, producers, transporters, suppliers, distributors,
markets and end-users of petroleum products, crude oil, chemicals, and other
bulk liquids.
FORWARD-LOOKING STATEMENTS
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This press release includes statements which may constitute forward-
looking statements made pursuant to the safe harbor provision of the Private
Securities Litigation Reform Act of 1995. This information may involve risks
and uncertainties that could cause actual results to differ materially from the
forward-looking statements. Although the company believes that the expectations
reflected in such forward-looking statements are based on reasonable
assumptions, such statements are subject to risks and uncertainties that could
cause actual results to differ materially from those projected.
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