Heating Oil Partners Income Fund

Heating Oil Partners Income Fund

June 30, 2005 11:07 ET

Heating Oil Partners Income Fund Provides Update on Credit Facilities


Heating Oil Partners Income Fund (the "Fund") (TSX:HIF.UN) announced today that the Fund's operating subsidiary, Heating Oil Partners, L.P. ("HOP" or the "Company"), is in current discussions with its bank lending group regarding its working capital and term loan facilities (together, the "Credit Facilities"). Specifically, these discussions involve waiving compliance with various financial covenant requirements and extending the current June 30, 2005 repayment date on any drawings that may remain outstanding under an additional US$15 million of working capital loans (the "Additional Agreement") that were previously provided by its bank lending group. The Company expects to reach an agreement with its bank lending group regarding these matters. Since March 31, 2005, the Company has reduced the balance of its revolver facility from US$56.4 million to US$45.3 million.

The Company is continuing to explore a variety of alternative financing opportunities to provide a longer-term solution for its seasonal working capital requirements and other capital structuring objectives. HOP cautioned that there can be no assurance that any such alternative financing will ultimately be achieved, or that the Company's lenders will agree to the requested waiver or to an extension of HOP's payment obligations under the Credit Facilities. HOP further cautioned that it may continue to require other future amendments to the Credit Facilities and/or the Additional Agreement. There is no assurance that such amendments, if required, will be ultimately approved by the lenders. The failure to obtain an extension of its payment obligations, or any other requested amendments, could have a material adverse impact on both the Company's and the Fund's financial condition.

The Fund indirectly owns approximately 88.1% of HOP, one of the largest residential heating oil distributors in the United States. HOP delivered over 229 million gallons of heating oil and other refined liquid petroleum products for the twelve months ended March 31, 2005 to approximately 137,00 residential and commercial customers, primarily in Connecticut, Delaware, Massachusetts, New Jersey, New York, Pennsylvania and Rhode Island. HOP's operations are conducted through 16 regional distribution and service centres. From these centres, HOP provides its customers with a full range of value-added services, including the delivery of heating oil and the installation, maintenance and service of furnaces, boilers, heating equipment and air conditioners on a 24 hours-a-day, 365 days-a-year basis.

This news release contains forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors outside of Management's control that could cause actual results to differ materially from those described in the forward-looking statements. The Fund does not assume responsibility for the accuracy and completeness of these forward-looking statements and does not undertake the obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.

Additional information, including the Fund's complete financial statements for the fiscal year ended September 30, 2004 and the quarter ended March 31, 2005, can be found at www.sedar.com or on the Fund's website at www.hif-un.com.

Contact Information

  • Heating Oil Partners, L.P.
    Carlos Rojas
    Chief Financial Officer
    (203) 655-8290