Eric Kalamaras, CFO of American Midstream, will step down from his role no later than December 31, 2019.
American Midstream is in the process of being taken private by ArcLight, a PE firm that already owns 51% of the company. The offer of $5.25 per common unit represents an acquisition price of $285 million. The transaction is expected to close during the second quarter.
American Midstream was formed in 2009 and went public in 2011. It moved its head office from Denver to west Houston in 2016. The company made a lot of acquisitions, mainly financed by debt.
Mr Kalamaras has been CFO since July 2016. He has a base salary of $300,00. For his severance package he will receive 12 months’ base salary, plus a pro-rated cash bonus. Last year’s bonus was $260,000.
All phantom stock units that Mr Kalamaras holds will vest at $5.25 per unit. This will amount to $662,366 at December 31, 2019. In addition, in August 2018, Mr Kalamaras, along with other senior executives, was awarded a special cash retention award that will also vest upon termination. For Mr Kalamaras this amounts to $623,712.
As a reminder during 2018 the company:
- filed its annual report late on April 1, 2019 due to going concern issues as its $522 million revolving credit facility matures in September 2019.
- filed its 2nd quarter report late due to its head office being closed to due to a water leak.
- reported material weaknesses in its internal controls over financial reporting. That was the 5th year in a row that the company reported material weaknesses.
- failed to obtain financing for its $818 million planned merger with Southcross Holdings (announced in October 2017). As a result, American Midstream had to pay a $17 million termination fee.
- Slashed its quarterly distribution by 75% in order to preserve cash flow. This caused the price of the stock units to drop from $11.55 to $6 in July.