Steel Partners Holdings L.P. (OTCQX: SPLP) is completing the full redemption of its 6.00% Series A Preferred Units by redeeming all remaining outstanding units in cash at $25.00 per unit plus accrued and unpaid distributions. This final step closes a multi-year process of redeeming these preferred units, reflecting Steel Partners’ ongoing effort to optimize capital structure and reduce fixed dividend obligations.
Executed under the terms of Steel Partners’ Eleventh Amended and Restated Agreement of Limited Partnership, the move allows the company to retire these units for cash, removing them from its capital base.
Prior to this final redemption, Steel Partners began reducing Series A Preferred Units years ago. In 2019, it redeemed a significant portion, approximately 20%, of the outstanding units. Since then, periodic partial redemptions have been conducted, steadily lowering the preferred units outstanding from almost 8 million units initially to about 5.78 million as of mid-2025. The final full redemption now retires the entire balance, concluding this chapter.
For investors, this means the steady 6.00% dividend income stream associated with these preferred units will end. While holders receive a lump sum cash payment of $25.00 per unit plus accrued dividends, they will lose a fixed income source that had been reliable for several years. This forces income-focused investors to seek alternatives for yield replacement, potentially adjusting their portfolios accordingly.
Steel Partners itself operates as a diversified global holding company with extensive interests ranging from industrial products and energy to defense, supply chain management, marketing, banking, and youth sports. It recently reported over $1 billion in revenue for the first half of 2025, showcasing growth across multiple sectors.
The decision to fully redeem the preferred units fits in with Steel Partners’ strategic approach to managing capital cost and flexibility. By retiring preferred units bearing a fixed 6.00% dividend, the company reduces fixed financial obligations, potentially lowering the weighted average cost of capital. This also benefits common unit investors by eliminating preferential financial claims and freeing up cash flow for reinvestment or other corporate uses.
Steel Partners’ methodical and transparent approach to redeeming the preferred units over several years, culminating now in this final full redemption, underscores careful capital stewardship rather than a reactive financial move. Market participants watching capital allocation decisions will look for how Steel Partners balances growth ambitions with income and capital return to all unitholders.
By eliminating this preferred dividend obligation, Steel Partners improves financial flexibility, which could support future acquisitions or operational investments. The immediate cash outflow is balanced by longer-term savings from dividend reductions. For the company and its investors, this marks a pivotal step in shaping a cleaner capital structure focused more on growth and less on fixed claims.Â
