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CNX Coal Resources acquires additional interest in PAMC

Published by
World Coal,


CNX Coal Resources LP (the partnership) and CONSOL Energy Inc. (the sponsor) have announced that the partnership has acquired an additional 5% undivided interest in the Pennsylvania Mining Complex (PAMC) and associated infrastructure from the sponsor for US$88.8 million.

The transaction is effective as of 30 September 2016.

The acquisition increased the partnership's undivided interest in the PAMC to 25%.

CNXC funded the transaction with a combination of available borrowings under its credit facility in the amount of US$21.5 million and the issuance of convertible preferred units representing limited partner interests (the preferred units) to the sponsor valued at US$67.3 million. The preferred units were issued at a price of US$17.01 per unit, a 15% premium to the volume weighted average price of CNXC's common units over the fifteen trading days ending on 29 September 2016. The preferred units will pay quarterly distributions in additional preferred units or cash, at the partnership's election, equal to an annual rate of 11% of the issue price, subject to certain adjustments. The partnership has the right to cause the conversion of all outstanding preferred units into common units, subject to certain conditions, at any time after 30 September 2019. In addition, the preferred units will be convertible into common units, generally on a one-for-one basis, subject to certain adjustments, at the holder's option after 30 September 2017.

"I am very excited about this acquisition as we increase our ownership of the premier coal mining assets in the US. These assets are very familiar to our unitholders and this transaction supports our previously outlined growth strategy," said Jimmy Brock, CEO of CNX Coal Resources GP LLC, the General Partner of the Partnership. "With coal markets beginning to recover, we believe the timing is right for us to consummate this acquisition. The transaction has been structured to allow more balance sheet flexibility for CNXC as well as create a larger base of cash flow to support ongoing partnership distributions."

"This is a win-win for both CONSOL Energy and CNX Coal Resources," commented Nicholas J. DeIuliis, President and CEO of CONSOL Energy Inc. "This transaction moves CONSOL one step closer to executing our strategic goal of fully separating the coal and gas businesses, while generating cash proceeds from the sale. All in, this deal strengthens CNXC's balance sheet and liquidity position, while benefitting CONSOL."

The terms of the acquisition and financing were approved by the conflicts committee of the board of directors of CNX Coal Resources GP LLC.

Read the article online at: https://www.worldcoal.com/coal/04102016/cnx-coal-resources-acquires-additional-interest-in-pamc/


 

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