CONSOL Energy Inc. (NYSE: CNX) has filed an amended Form S1 with the U.S. Securities and Exchange Commission (SEC) setting terms for an initial public offering (IPO) of a master limited partnership (MLP) to manage and further develop all its active thermal coal operations in Pennsylvania. The MLP, to be named CNX Coal Resources L.P., plans to offer 10 million partnership units in a price range of $19 to $21 per common unit. At the midpoint of the range, CNX Coal Resources would raise gross proceeds of $200 million.

CNX Coal Resources is expected to price the IPO next week. The common units will trade on the New York Stock Exchange under the ticker symbol CNXC.

Joint bookrunners for the offering include Bank of America Merrill Lynch, Wells Fargo Securities, Citigroup, Jefferies, Scotiabank/Howard Weil, Credit Suisse, JPMorgan, Evercore Partners, BB&T Capital Markets, Goldman Sachs, Huntington Investment, Stifel and Nomura Securities. Co-managers include Clarkson Capital Markets, Cowen and Tuohy Brothers. The underwriters have a 30-day option on an additional 1.5 million shares.

ALSO READ: 6 Analyst Stocks With 50% to 100% Upside Calls

The new MLP’s initial assets include a 20% undivided interest in, and operational control over, CONSOL’s Pennsylvania mining complex, which consists of three underground mines and related infrastructure that produce thermal coal sold primarily to electric utilities in the eastern United States. Total reserves for the three mines is about 786 million tons and annual production capacity is estimated at 28.5 million tons. In 2014, the three mines produced 26.1 million tons of coal.

The common units being offered represent a 42.2% limited partner interest in CNX Coal Resources (or a 48.5% limited partner interest if the underwriters exercise in full their option to purchase additional common units). CONSOL Energy will own a 55.8% limited partner interest in CNX Coal Resources (or a 49.5% limited partner interest if the underwriters exercise in full their option to purchase additional common units). CONSOL also will own, through its ownership of CNX Coal Resources G.P. LLC, the general partner of CNX Coal Resources, a 2% general partner interest and the incentive distribution rights in CNX Coal Resources.

All proceeds from this offering, including the underwriters’ overallotment option, are being distributed to CONSOL Energy. The new company expects to make a quarterly distribution of $0.5125 per common unit. The first payment will be made for a period beginning at the closing of this offering and ending on September 30, 2015.

The last coal MLP to launch an IPO was Foresight Energy L.P. (NYSE: FELP), which came public in June of last year. Common units went out at $20 and closed on Monday at $14.63, down about 27% since the IPO.

ALSO READ: 4 Merrill Lynch High Quality and Dividend Yield Stocks to Buy Now

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.