Consol Energy’s thermal coal unit CNX launches IPO for 42.2%
TORONTO (miningweekly.com) – CNX Coal Resources, a master limited partnership established by US fossil fuels producer Consol Energy has launched an initial public offering of ten-million common units, representing a 42.2% limited partner interest in the thermal coal business.
If used in full, their option to purchase the underwriters exercised additional common units could grow to a 48.5% interest in CNX, which was a new spin-off tasked to run Consol's Pennsylvania coal mines and, possibly, other operations.
Consol, a coal and natural gas company, said in a US Securities Exchange Commission filing that it was prepared to sell up to 11.5-million shares in CNX at $19 to $21 a share. Consol would retain a stake of between 49.5% and 55.8% in the partnership.
Consol in March formed the spin-off as a master limited partnership, which provided certain tax benefits for energy companies, while allowing them to seek separate investment in assets.
CNX would include Consol's Bailey, Enlow Fork and Harvey coal mines in the Greene and Washington counties, and could later assume Consol's Buchanan metallurgical coal mine, in Virginia, its Baltimore export terminal and natural gas gathering pipeline system in Virginia, Kentucky and West Virginia.
CNX's revenue rose 21% to about $334-million in the year ended December 31. The company's net income rose about 30% to $84-million.
Coal miners have been weighed down owing to US utilities switching to cheaper natural gas from power-generating coal and weaker demand for steelmaking coal from top consumer China.
Bank of America Merrill Lynch and Wells Fargo Securities are the underwriters of the offering.
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