CNX CoalResources LP has increased its stake in the Pennsylvania MiningComplex, buying an additional 5% interest in the complex for $88.8 million fromCONSOL Energy Inc.
CNX now owns 25% of the Pennsylvania Mining Complex, whichconsists of the Bailey, Enlow Fork and Harvey underground mines, located in thePittsburgh seam.
"With coal markets beginning to recover, we believe thetiming is right for us to consummate this acquisition," CNX Coal ResourcesCEO Jimmy Brock said in a news release. "The transaction has beenstructured to allow more balance sheet flexibility for CNXC as well as create alarger base of cash flow to support ongoing partnership distributions."
CNX funded the acquisition with $21.5 million from itscredit facility and by issuing convertible preferred units representing limitedpartner interests to CONSOL valued at $67.3 million.
"This is a win-win for both CONSOL Energy and CNX CoalResources," said CONSOL President and CEO Nicholas DeIuliis. "Thistransaction moves CONSOL one step closer to executing our strategic goal offully separating the coal and gas businesses, while generating cash proceedsfrom the sale. All in, this deal strengthens [CNX's] balance sheet andliquidity position, while benefitting CONSOL."
CNX Coal Resources is a master limited partnership thatCONSOL formed inmid-2015 to manage and develop its thermal coal operation in Pennsylvania.