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Murray Energy revises coal deal

World Coal,

Murray Energy and Foresight Reserves have entered into a new definitive agreement, for a transaction whereby Murray Energy is expected to acquire a significant economic interest in Foresight Energy.

The previous agreement pursuant to which Murray Energy was expected to acquire interest in Foresight Energy has been terminated. According to Bloomberg, the coal miner revised the terms of the original deal to acquire a stake in Foresight Energy after struggling to raise the required debt.

Following the closing, Christopher Cline, the founder of Foresight Energy, will maintain a 66% voting interest and an approximate 36% economic interest in the company. Cline will remain actively involved as chairman of the Board of Directors of Foresight Energy. In addition, he will join the Board of Murray Energy. Robert E. Murray will remain the Chairman, President and CEO of Murray Energy.

Murray Energy will pay Foresight Reserves cash consideration of approximately US$1.37 billion for a 50% stake in Foresight. The company will retain the same access to certain other coal handling, transportation and transloading facilities as provided under the previous agreement.

According to a statement from Murray Energy, the two parties “believe this new business partnership will lead to significant synergies as previously disclosed, which will, in turn, lead to even lower mining costs and safer operations, and will provide for future growth of both companies through integrations and future drop-downs of other assets into the public partnership.”

The revised Foresight deal is the largest in the US coal industry since Murray’s purchase of a unit of Consol Energy Inc. for US$850 million in 2013, according to Bloomberg data.

Edited from various sources by Katie Woodward

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