HOUSTON, TX - Par Pacific Holdings, Inc. (NYSE:PARR), a player in the crude petroleum and natural gas industry, has announced an increase in its term loan credit agreement on Monday. The company, together with its subsidiaries Par Petroleum, LLC, and Par Petroleum Finance Corp., has received commitment indications from lenders to boost the size of the term loan by $100 million, bringing the total initial principal balance to $650 million, with an outstanding balance of $641.750 million.
This development comes after the initial senior secured term loan of $550 million was provided under the term loan credit agreement with Wells Fargo (NYSE:WFC) Bank, National Association acting as the administrative agent, and other lenders. The increase in the term loan is designated for general corporate purposes, as stated in the 8-K filing with the Securities and Exchange Commission.
The additional funding is expected to be executed on or around November 25, 2024, with the agreement effective from that date. This step is part of the company's strategic financial management and is aimed at strengthening its financial position.
The company has indicated that a detailed description of Amendment No. 2 to the Term Loan Credit Agreement will be filed with its Annual Report on Form 10-K for the fiscal year ending December 31, 2024. This report will provide investors and stakeholders with a comprehensive insight into the terms of the agreement.
Par Pacific's move is accompanied by forward-looking statements that involve risks and uncertainties, including market conditions and other identified risks. The company cautions investors not to rely too heavily on these statements, which are valid only as of the date of the report.
This financial maneuver reflects Par Pacific's ongoing efforts to optimize its capital structure and ensure resources are available for its corporate needs. The information disclosed is based on the company's recent SEC filing, offering a transparent view of its financial activities.
In other recent news, Par Pacific Holdings Inc. has experienced significant developments. The company announced the upcoming resignation of board member Mr. Anthony Chase, effective November 15, 2024, due to personal reasons. This departure will create a vacancy on both the Board of Directors and its Nominating and Corporate Governance Committee.
In terms of financial performance, Par Pacific reported mixed results for the third quarter of 2024, with an adjusted EBITDA of $51 million and an adjusted net loss of $0.10 per share. Despite a slight decline in same-store fuel volumes, the company achieved a record refining throughput of 198,000 barrels per day and a 3.8% increase in merchandise sales.
Looking ahead, Par Pacific plans to cut its fixed operating expenses by $30 million to $40 million in 2025 to improve market resilience. Additionally, the company is investing in a Sustainable Aviation Fuel (SAF) project in Hawaii as part of its strategic growth initiatives. Par Pacific maintains a strong liquidity position with $633 million in cash. These are recent developments that reflect the company's focus on operational efficiency, cost reduction, and strategic growth.
InvestingPro Insights
Par Pacific's recent move to increase its term loan by $100 million aligns with InvestingPro data indicating that the company "operates with a significant debt burden." This additional funding, while potentially providing more financial flexibility, may further contribute to this debt profile.
Despite the increased debt, InvestingPro Tips suggest that Par Pacific's management "has been aggressively buying back shares," which could signal confidence in the company's future prospects. Additionally, the company's "liquid assets exceed short term obligations," potentially mitigating some concerns about the increased debt load.
It's worth noting that Par Pacific's stock is "trading at a low revenue valuation multiple," with a P/E Ratio of 3.28 according to InvestingPro Data. This low valuation could be attractive to investors, especially considering that analysts predict the company will remain profitable this year.
For those interested in a deeper analysis, InvestingPro offers 11 additional tips for Par Pacific, providing a more comprehensive view of the company's financial health and market position.
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