Chris Paryse on Ferrellgas's big conversion $FGPR

Summary

The interview focuses on Ferrellgas (FGPR), a post-bankruptcy propane distributor that just completed a Class B-to-Class A unit conversion. Guest Chris Paryse explains how the conversion more than doubles the free float, simplifies the capital structure, and sets up a possible NASDAQ uplisting and dividend reinstatement. He lays out the leverage and preferred overhang, the path to deleveraging, and the long-term M&A opportunity in a fragmented propane market. The main market implication is a potential equity re-rating if these catalysts materialize.

• Ferrellgas emerged from 2020 bankruptcy with a complex debt, preferred, and Class B unit structure.
• The completed Class B conversion paid off $357M and converted into Class A units, more than doubling free float.
• Pro forma free cash flow is about $85-90M; leverage is around 6.8x through preferreds with a 7x dividend covenant.
• A dividend reinstatement is expected around next year, and a NASDAQ uplisting could happen by summer.
• Preferreds are a legacy, expensive overhang and a potential deleveraging target.
• The fragmented propane industry offers an M&A consolidation runway, with equity potentially used as currency.
• Key risks include weather dependence, leverage, low insider ownership, and extreme illiquidity.
• A private equity take-private was discussed but seen as unlikely because Jim Ferrell controls the GP.