SCHEDULE 13D/A: Kinetik Holdings Inc. Sees Board Shift as Major Shareholder Reduces Stake
Beneficial Ownership Update
ISQ Global Fund II GP LLC and its affiliates have reduced their beneficial ownership in Kinetik Holdings Inc. to 34.4%, leading to a change in their board designation rights and the resignation of director Jesse Krynak.
Summary
- ISQ Global Fund II GP LLC, I Squared Capital, LLC, ISQ Holdings, LLC, Wahba Sadek, and Gautam Bhandari (collectively, 'Reporting Persons' or 'ISQ') have filed Amendment No. 10 to their Schedule 13D regarding Kinetik Holdings Inc. (the 'Issuer').
- The Reporting Persons collectively beneficially own 30,134,083 shares of Class A Common Stock, representing 34.4% of the class.
- This beneficial ownership includes 27,489,164 Common Units (redeemable for Class A Common Stock on a one-for-one basis) and 1,600,399 shares of Class A Common Stock acquirable under the Contribution Allocation Agreement.
- Following the sale of 3,952,431 shares of Class A Common Stock by Buzzard Midstream LLC (an ISQ affiliate) on March 4, 2025, ISQ's beneficial ownership for purposes of the A&R Shareholder Agreement ('A&R SHA') decreased.
- ISQ now beneficially owns an aggregate of 28,533,684 shares of Common Stock (Class A and Class C) for A&R SHA purposes, which represents approximately 18.1% of the total Common Stock outstanding for A&R SHA purposes.
- As a result of falling below the 20% ownership threshold specified in the A&R SHA, ISQ's right to designate directors to the Board of Kinetik Holdings Inc. has changed from two directors to one director.
- In connection with this change, Jesse Krynak, one of the two directors previously designated by ISQ, resigned from the Board on March 12, 2025.
Sentiment
Score: 4
Explanation: The document reports a factual reduction in a major shareholder's stake and corresponding board representation, which is generally perceived as a negative signal regarding the shareholder's commitment or confidence, although the document itself is neutral in tone.
Negatives
- A significant shareholder, ISQ, has reduced its stake in Kinetik Holdings Inc. by selling 3,952,431 shares of Class A Common Stock.
- The reduction in ISQ's beneficial ownership has led to a decrease in their board designation rights, from two directors to one, indicating reduced influence over the company's governance.
- The resignation of Jesse Krynak from the Board signifies a direct loss of a board seat for the major shareholder.
Future Outlook
NA
Industry Context
NA
Management Changes
| Role | Previous Person | New Person | Effective Date | Reason |
|---|---|---|---|---|
| Director | Jesse Krynak | NA | 2025-03-12 | Resignation due to ISQ's reduced beneficial ownership falling below the 20% threshold for two board designees as per the A&R Shareholder Agreement. |
Corporate Governance
| Change Type | Description | Effective Date | Impact Assessment |
|---|---|---|---|
| Board Designation Rights | ISQ's right to designate directors to the Board changed from two directors to one director, as their beneficial ownership for A&R SHA purposes fell below the 20% threshold (specifically to 18.1%). | 2025-03-12 | Reduces the direct influence of ISQ, a significant shareholder, on the company's strategic direction and governance through board representation. |
Related Party Transactions
- The sale of 3,952,431 shares of Class A Common Stock by Buzzard Midstream LLC, an affiliate of the Reporting Persons (ISQ), on March 4, 2025.
- The A&R Shareholder Agreement (A&R SHA) governs the rights of ISQ, including board designation rights, based on their beneficial ownership percentage.
Stakeholder Impact
- Shareholders: May perceive a reduction in the influence of a major institutional investor (ISQ) on the company's governance and strategic decisions due to the reduced board representation.
Key Dates
| Date | Description |
|---|---|
| 2022-03-04 | Original Schedule 13D filed with the SEC. |
| 2022-05-19 | Amendment No. 1 to Schedule 13D filed with the SEC. |
| 2022-08-19 | Amendment No. 2 to Schedule 13D filed with the SEC. |
| 2022-11-21 | Amendment No. 3 to Schedule 13D filed with the SEC. |
| 2023-02-21 | Amendment No. 4 to Schedule 13D filed with the SEC. |
| 2023-05-19 | Amendment No. 5 to Schedule 13D filed with the SEC. |
| 2023-08-18 | Amendment No. 6 to Schedule 13D filed with the SEC. |
| 2023-11-27 | Amendment No. 7 to Schedule 13D filed with the SEC. |
| 2024-03-11 | Amendment No. 8 to Schedule 13D filed with the SEC. |
| 2025-02-21 | Date as of which 60,078,190 shares of Class A Common Stock and 97,696,784 shares of Class C Common Stock were outstanding, as reported in the Issuer's 10-K. |
| 2025-03-03 | Issuer's annual report on Form 10-K filed with the SEC. |
| 2025-03-04 | Sale of 3,952,431 shares of Class A Common Stock for the account of Buzzard Midstream LLC. |
| 2025-03-06 | Amendment No. 9 to Schedule 13D filed with the SEC. |
| 2025-03-12 | Jesse Krynak resigned from the Board of Directors. |
| 2025-03-14 | Date of filing of this Amendment No. 10 to Schedule 13D. |
Keywords
Kinetik Holdings Inc., Schedule 13D, beneficial ownership, Class A Common Stock, board of directors, director resignation, ISQ Global Fund, I Squared Capital, corporate governance, shareholder agreement
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