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Southern Cross Group to acquire SIPSA interest in Ultrapetrol

The major shareholders of Ultrapetrol (Bahamas) Ltd (Nasdaq:ULTR), an industrial transportation company serving marine transportation needs in three markets (River Business, Offshore Supply Business and Ocean Business), have entered into a share purchase agreement with respect to the sale of shares of Ultrapetrol and of certain affiliates. 

Source:
Date:
Updated:
Ultrapetrol (Bahamas) Limited
Monday, July 14, 2014
Monday, July 14, 2014

[Note: Any reference to ratings and its underlying recommendation does not reflect the opinion of The Bahamas Investor or any of its contributors.]

NASSAU, Bahamas, July 13, 2014 (GLOBE NEWSWIRE) — The major shareholders of Ultrapetrol (Bahamas) Limited (Nasdaq:ULTR) (“Ultrapetrol” or the “Company”), an industrial transportation company serving marine transportation needs in three markets (River Business, Offshore Supply Business and Ocean Business), entered into a share purchase agreement with respect to the sale of shares of Ultrapetrol and of certain affiliates of the major shareholders between such shareholders. Under the agreement, Sparrow Capital Investments Ltd. (“Sparrow”) a subsidiary of Southern Cross Latin America Private Equity Funds III and IV (“Southern Cross”), reached an agreement with Hazels (Bahamas) Investments Inc. (“Hazels”) and Inversiones Los Avellanos S.A. (“Los Avellanos”), each a subsidiary of SIPSA S.A (“SIPSA”) to purchase all of Hazels’ and Los Avellanos’ outstanding equity interests in the Company, increasing Southern Cross’ interest in the Company from 67% to 85%.

Under the terms of the agreement, Sparrow will acquire from Hazels, Los Avellanos, and certain entities affiliated with them, the rights to 25,326,821 shares of common stock of the Company (“Common Stock”). The price has been agreed at the equivalent of $4.00 per share of Common Stock. Upon completion of the transaction, the capital of the Company will be comprised exclusively of single voting shares.

The transaction is expected to close in the next 60 days and the agreement sets forth certain customary closing conditions, including having SIPSA and Los Avellanos receive approval from its shareholders for the transaction and the receipt of certain waivers from lenders of Ultrapetrol. The agreement also provides Hazels with the opportunity to offer to purchase Ultrapetrol’s Ocean Business for a price to be determined, subject to terms and conditions including the approval of the independent director of Ultrapetrol.

In connection with the transaction, it has been agreed with Felipe Menéndez and Ricardo Menéndez that the Company will terminate their respective employment and consulting agreements upon closing and enter into new employment and consulting agreements. Felipe Menéndez and Ricardo Menéndez will remain with Ultrapetrol as directors. The terms of the new employment and consulting agreements will be for up to six months. The vesting of unvested options and restricted stock awards will be accelerated so that they will be exercisable and vested immediately before the termination of the agreements. Under certain of the Company’s existing loan agreements, it will need to receive a waiver from the applicable lender before Messrs. Felipe and Ricardo Menendez leave their management positions with the Company. A new Chief Executive Officer of Ultrapetrol is expected to be appointed effective as of the closing of the transaction.

The Company also announced today that it has appointed Rodrigo Lowndes to its board of directors, effective immediately, following the resignation of Fernando Barros. Mr. Lowndes, a Brazilian national, is a partner with Southern Cross in the Sao Paolo office and has been with the firm since 2009. Prior to joining Southern Cross, Mr. Lowndes co-founded Emerging Capital, a Brazilian asset management company. Before then, he worked for Morgan Stanley in New York and Brazil where he was President and Head of Investment Banking. He has served on the board of several Southern Cross portfolio companies.

Mr. Horacio Reyser, Chairman of Ultrapetrol and a Southern Cross partner, said, “We are pleased to have Mr. Lowndes join the Board and look forward to his contributions to the Company. I would also like to thank Mr. Barros for his service as a Board member and his dedication to the Company over the years.”

About Ultrapetrol
Ultrapetrol is an industrial transportation company serving the marine transportation needs of its clients in the markets on which it focuses. It serves the shipping markets for containers, grain and soya bean products, forest products, minerals, crude oil, petroleum, and refined petroleum products, as well as the offshore oil platform supply market with its extensive and diverse fleet of vessels. These include river barges and pushboats, platform supply vessels, tankers and two container feeder vessels. More information on Ultrapetrol can be found at www.ultrapetrol.net.

About Southern Cross Group
Southern Cross is one of the largest private equity firms in Latin America. Southern Cross´ investment strategy is based on investing in companies that have significant potential for improved performance and growth. Since inception, Southern Cross has raised over $2.5 billion and has invested in over 30 companies in a wide range of industries, including energy, oil & gas, logistics, consumer goods, retail, homebuilding, entertainment public services, IT, and telecom. Southern Cross seeks to deliver superior returns by the optimization of companies’ strategic direction and operating performance. As a result of its extensive regional experience, Southern Cross is well-positioned to identify and capitalize on high quality investment opportunities in Latin America.

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