Chris Paryse

Ferrellgas is a post-bankruptcy propane distributor that has just completed a complicated Class B-to-Class A conversion. The Class B units were old holdco debt that entitled holders to $357M of dividends plus a dilution factor; the 5x conversion paid them off and converted 1.3M Bs into 6.5M As, more than doubling the free float and avoiding further dilution. The simplified structure sets up a likely NASDAQ uplisting by summer, a path to reinstating a dividend (possibly $3-5/unit) after deleveraging below the preferred's 7x covenant, and a valuation re-rating. Pro forma FCF is about $85-90M; if half is paid out, the dividend could be about $370-380/unit and support a high-30s stock at a 10% yield, with $40-50 possible in 12-18 months.