Related Party Transactions |
12 Months Ended |
|---|---|
Dec. 31, 2018 | |
| Related Party Transactions [Abstract] | |
| Related Party Transactions |
26. Related Party Transactions:
The Company maintains certain policies and procedures for the review, approval and ratification of related party transactions to ensure that all transactions with selected parties are fair, reasonable and in the Company’s best interests. All significant relationships and transactions are separately identified by management if they meet the definition of a related party or a related party transaction. Related party transactions include transactions that occurred during the year, or are currently proposed, in which the Company was or will be a participant, and for which any related person had or will have a direct or indirect material interest. All related party transactions are reviewed, approved and documented by the appropriate level of the Company’s management in accordance with these policies and procedures.
On December 29, 2014, PQ Holdings, CCMP and PQ Corporation entered into a consulting agreement relating to the provision of certain financial and strategic advisory services and consulting services. Similarly, the consulting agreement between PQ Holdings, INEOS Capital Partners and PQ Corporation was amended and restated. Under the new consulting agreements, the Company agreed to pay an annual management fee of $5,000 distributed to CCMP and INEOS AG equal to the Pro Rata Percentage, as defined, between CCMP and INEOS AG. These consulting agreements were terminated upon completion of the Company’s IPO on October 3, 2017. The Company recorded $3,777 and $3,584 of management advisory fees in other operating expense, net in the consolidated statements of operations for the years ended December 31, 2017 and 2016, respectively.
Transactions with Board of Directors
In connection with the offering by PQ Corporation of $525,000 aggregate principal amount of Senior Unsecured Notes due 2022 in May 2016, a member of the Company’s board of directors purchased $4,000 in principal amount of such notes. Interest accrued on the notes at an annual rate equal to three-month LIBOR plus 10.75%, with a 1.0% LIBOR floor, payable and reset quarterly. The director received interest payments in respect of the notes totaling $362 and $300 during the years ended December 31, 2017 and 2016, respectively. The notes were partially redeemed in October 2017 in connection with the Company’s IPO, and redeemed in full in December 2017 in connection with the Company’s issuance and sale of the $300,000 Senior Unsecured Notes due 2025 (see Note 16). The director received $4,000 of principal amount of such notes as well as $338 related to the prepayment penalties in connection with these two transactions.
Joint Venture Agreement
The Company entered into a joint venture agreement (the “ZI Partnership Agreement”) in 1988 with CRI Zeolites Inc., a Royal Dutch Shell plc affiliate, to form Zeolyst International, our 50/50 joint venture partnership (the “Partnership”). Under the terms of the ZI Partnership Agreement, the Partnership leases certain land used in its Kansas City production facilities from PQ Corporation. This lease, which has been recorded as an operating lease, provided for rental payments of $295, $295 and $187 during the years ended December 31, 2018, 2017 and 2016, respectively. The terms of this lease are evergreen as long as the ZI Partnership Agreement is in place. The Partnership recognized sales to the Company of $645, $2,475 and $1,191 during the years ended December 31, 2018, 2017 and 2016. respectively.
The Partnership purchases certain of its raw materials from the Company and is charged for various manufacturing costs incurred at the Company’s Kansas City production facility. The amount of these costs charged to the Partnership were $16,869, $17,470 and $10,707 for the years ended December 31, 2018, 2017 and 2016, respectively. Certain administrative, marketing, engineering, management-related, and research and development services are provided to the Partnership by the Company. During the years ended December 31, 2018, 2017 and 2016, the Partnership was charged $12,727, $12,248 and $8,169, respectively, for these services. In addition, the Partnership was charged certain product demonstration costs of $1,768, $2,175 and $1,663 during the years ended December 31, 2018, 2017 and 2016, respectively. These charges to the Partnership are recorded as reductions in either cost of goods sold or selling, general and administrative expenses in the consolidated statements of operations, depending on the nature of the expenditures.
Other
From time to time, the Company makes sales to portfolio companies of funds that are affiliated with CCMP and companies that are affiliated with INEOS Capital Partners. The Company had sales of $5,587 and $8,396 to companies affiliated with INEOS Capital Partners during the years ended December 31, 2018 and 2017, respectively. Sales were immaterial to companies affiliated with INEOS Capital Partners during the years ended December 31, 2016.
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