Alliance Resource Partners, L.P. (ARLP) has reached an agreement with White Oak Resources to acquire all of the equity interests in White Oak Resources.
ARLP will pay US$50 million at closing through cash on hand and availability under its current credit facilities. The transaction will be subject to certain approvals and other customary conditions.
ARLP estimates cost synergies at White Oak of US$12 million to US$18 million annually at the start of next year as a result of this transaction.
Once the agreement has been closed, Alliance WOR Processing, a wholly own subsidiary of ARLP, will take on operating control of the White Oak Mine No. 1.
Once completed, ARLP will own 100% of the equity interests in White Oak and coal reserves at the White Oak Mine No. 1 that are leased to White Oak as well as the preparation plant and loading facilities at the mine.
Strategically, owning 100% of White Oak and assuming operating control of the White Oak Mine No. 1 enhances our already strong presence in the Illinois Basin,” said Joseph W. Craft III, President and CEO. “The White Oak mine is a world-class, low-cost longwall operation with an extensive reserve base. It will be an attractive addition to our asset portfolio and provide ARLP increased flexibility to service our existing customer base and the opportunity to expand into additional markets. In the near term, White Oak gives us greater optionality to optimise our production to current market conditions. Longer term, the ability to add a second longwall at White Oak gives us an additional platform to increase our coal volumes should market conditions allow. We look forward to welcoming White Oak’s employees to the Alliance team.”
Edited from Press Release by Harleigh Hobbs
Read the article online at: https://www.worldcoal.com/coal/06072015/alliance-resource-partners-lp-to-acquire-white-oak-equity-interests-2520/