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Investments in Other Entities and Noncontrolling Interest in a Subsidiary
6 Months Ended
Jun. 30, 2020
Investments, All Other Investments [Abstract]  
Investments in Other Entities and Noncontrolling Interest in a Subsidiary

Note 3— Investments in Other Entities and Noncontrolling Interest in a Subsidiary

SAFE&CEC S.r.l.

On November 26, 2017, the Company, through its former subsidiary IMW Industries Ltd. (formerly known as Clean Energy Compression Corp.) (“CEC”), entered into an investment agreement with Landi Renzo S.p.A. (“LR”), an alternative fuels company based in Italy. Pursuant to the investment agreement, the Company and LR agreed to combine their respective natural gas compressor fueling systems manufacturing subsidiaries, CEC and SAFE S.p.A, in a new company, SAFE&CEC S.r.l. (such combination transaction is referred to as the “CEC Combination”). SAFE&CEC S.r.l. is focused on manufacturing, selling and servicing natural gas fueling compressors and related equipment for the global natural gas fueling market. As of the closing of the CEC Combination on December 29, 2017, the Company owns 49% of SAFE&CEC S.r.l. and LR owns 51% of SAFE&CEC S.r.l.

The Company accounts for its interest in SAFE&CEC S.r.l. using the equity method of accounting because the Company does not control but has the ability to exercise significant influence over SAFE&CEC S.r.l.’s operations. The Company recorded a loss of $0.0 million and $0.5 million from this investment for the three months ended June 30, 2019 and 2020, respectively, and $0.4 million and $0.4 million for the six months ended June 30, 2019 and 2020, respectively. The Company had an investment balance in SAFE&CEC S.r.l. of $23.7 million and $22.6 million as of December 31, 2019 and June 30, 2020, respectively.

NG Advantage

On October 14, 2014, the Company entered into a Common Unit Purchase Agreement (“UPA”) with NG Advantage for a 53.3% controlling interest in NG Advantage. NG Advantage is engaged in the business of transporting CNG in high-capacity trailers to industrial and institutional energy users, such as hospitals, food processors, manufacturers and paper mills that do not have direct access to natural gas pipelines.

NG Advantage has entered into an arrangement with BP Products North America (“BP”) for the supply, sale and reservation of a specified volume of CNG transportation capacity until March 2022. In June 2020, we paid BP $7.8 million to terminate a portion of the forgoing arrangement. In connection with the arrangement, on February 28, 2018, the Company entered into a guaranty agreement with NG Advantage and BP pursuant to which the Company guarantees NG Advantage’s payment obligations to BP in the event of default by NG Advantage under the supply arrangement, in an amount up to an aggregate of $30.0 million plus related fees, which was reduced to $15.0 million effective June 24, 2020. This guaranty is in effect until thirty days following the Company’s notice to BP of its termination.

As of December 31, 2019, NG Advantage had an outstanding balance of $26.7 million, plus accrued and unpaid interest, under the delayed draw convertible promissory note entered into with the Company in November 2019 (the “November 2019 Convertible Note”). On February 6, 2020, the Company converted the outstanding principal and accrued interest under the November 2019 Convertible Note into common units of NG Advantage resulting in an increase in the Company’s controlling interest in NG Advantage from 64.6% to 93.2%.

On February 29, 2020, NG Advantage issued to the Company 283,019 common units pursuant to the guaranty agreement entered in February 2018, which increased the Company’s controlling interest in NG Advantage to 93.3% as of June 30, 2020.

The Company recorded a loss attributable to the noncontrolling interest in NG Advantage of $1.7 million and $0.3 million for the three months ended June 30, 2019 and 2020, respectively, and $3.6 million and $1.1 million for the six months ended June 30, 2019 and 2020, respectively. The value of the noncontrolling interest was $9.6 million and $9.9 million as of December 31, 2019 and June 30, 2020, respectively.