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K-Sea Transportation Partners L.P. has announced that it has closed the second portion of its recently announced agreement with KA First Reserve, LLC by selling an additional 2.8 million convertible preferred units for $15 million in cash.

The news follows the announcement earlier this week that the US barge operator completed the sale of 15.7 million convertible preferred units to KA First Reserve in exchange for $85 million in cash on Friday 10th September.

In total, the company has raised $100 million in exchange for a total of 18.5 million convertible preferred units.

All of the proceeds from the sale of the preferred units will be used to reduce outstanding debt and pay fees and expenses related to the transaction.

Commenting on the agreement with KA First Reserve earlier this month, President and CEO Timothy J. Casey said, "We are very pleased with our new association with First Reserve and Kayne Anderson. These organizations have a wealth of experience and expertise in the MLP and energy businesses. Their decision to invest in us is a testimony to K-Sea's leading industry position and the strength of our Company. With our balance sheet recapitalization behind us, we will be able to focus on operations, results and new opportunities. We remain convinced the domestic market for marine transportation of refined petroleum products will rebound significantly when demand recovers and single hull vessels leave the market permanently."

Speaking about the company's upcoming first quarter results ending September 30, 2010, Casey said: "Even though our practice is not to forecast results, we would like to provide some commentary on the first quarter ending September 30, 2010. Our results will benefit from having eight of our vessels, including five single hull units, working in the U.S. Gulf as part of the oil spill clean-up effort. These vessels will be employed for most of the quarter. We expect that at least one-half of the units will be off charter by the middle of September. Also, we expect to record a modest gain on the aforementioned asset sales."