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MSD Capital Welcomes Vitol’s Willingness to Consider Modifications to Its ‘Unfair and Inappropriate’ Planned Restructuring of Blueknight Energy Partners

December 23, 2010

NEW YORK, Dec. 23, 2010 /PRNewswire/ — MSD Capital, L.P. today delivered to Vitol Inc., the co-general partner of Blueknight Energy Partners, LP (BKEP), a letter in which it welcomed Vitol’s willingness to consider modifications of its current plan to restructure the Partnership. Blueknight Energy Partners is a midstream energy company in which MSD owns 16.5% of the common units outstanding. Following is the full text of the letter MSD sent to Vitol’s chief executive officer today:


    December 23, 2010

    James C. Dyer, IV
    Blueknight Energy Partners G.P., L.L.C.
    c/o Vitol Inc.
    1100 Louisiana Street
    Suite 5500
    Houston, TX 77002-5255

    Dear Mr. Dyer:

    Thank you for your letter of December 21.

    We are pleased to hear that you care about the views of your limited
     partners.  If the phone calls that you have been receiving in recent
     days are anything like the ones that we have gotten, then you have no
     doubt heard an outpouring of discontent with the current Global
     Transaction Agreement ("GTA") from both large and small shareholders
     alike.  In the long run, the only way that Blueknight will be
     successful is if its general partner is willing and able to build a
     mutually beneficial long-term relationship with the Partnership's
     limited partners.

    We continue to believe in the validity of the views expressed in our
     prior letter.  Of course, we have never questioned the need for
     Blueknight to restructure its balance sheet.  Our concerns center
     around the process that led to the current GTA and the numerous ways in
     which, as outlined in our previous letter, it violates the Partnership
     Agreement and is not in the best long-term interests of the
     Partnership.  Notwithstanding any advice that you may have received,
     the proposed plan is not fair or appropriate.  Blueknight can, and
     should, do better.

    We welcome your willingness to consider modifications to the current
     GTA.  In order to remedy the GTA's current faults, however, these
     potential modifications will have to be quite fundamental.  If you are
     open to such a discussion, we are certainly willing to meet with you.
     We assume that if you are genuine in the sentiments expressed in your
     letter, you will meet with us promptly and in advance of any further
     action related to the GTA.

    If you agree to the above, please contact me to schedule a mutually
     convenient time to meet.

    Thank you again for your reply.

    Very truly yours,

    Daniel Shuchman
    Partner

    cc: Board of Directors, Blueknight Energy Partners, L.P.

About MSD Capital, L.P.

Founded in 1998, MSD Capital is the private investment firm for Michael Dell and his family. The firm currently manages in excess of $12 billion in assets utilizing a multi-disciplinary investment strategy encompassing traditional private equity activities, real estate and investments in publicly-traded securities, in each case with the objective of building an investment portfolio focused on maximizing long-term capital appreciation. MSD Capital’s team of over 80 people operates from the firm’s offices in New York, Santa Monica and London. Additional information is available at www.msdcapital.com.


    Contact:    Todd Fogarty
                Kekst and Company
                212-521-4854
                todd-fogarty@kekst.com

SOURCE MSD Capital, L.P.


Source: newswire