History
CONSOL Coal Resources listed in 2015 to hold a stake in a Pennsylvania mine complex, grew it to 25%, then was absorbed by its parent in 2020.
2015-2017: Listing and a bigger stake
CONSOL Coal Resources LP was set up to hold part of the Pennsylvania mining complex run by its parent, CONSOL Energy. The New York Stock Exchange cleared its units for trading in June 2015, and the initial public offering was completed on July 7, 2015. The partnership sold 5,000,000 common units to the public at $15.00 each, and a further 5,000,000 units went to Greenlight Capital funds in a $75.0 million private sale. Underwriters also had an option for up to 750,000 more units. Shares on issue stood at 11,611,067 at the end of 2015.
Agreements with CONSOL Energy made CNX Thermal the operator of the complex, with CONSOL keeping an 80% interest. The partnership received a right of first offer on that interest, and on the Baltimore Marine Terminal, Buchanan mine and Cardinal Gathering System. It agreed to pay CONSOL a $9.4 million annual administrative support fee and a $0.7 million executive support fee.
On September 30, 2016, it used those rights for the first time, buying a further 5% undivided interest in the complex, taking its total to 25%. The price was $21.5 million in cash plus 3,956,496 Class A Preferred Units, valued at $67.3 million. These carried a cumulative 11.0% annual distribution, paid ahead of common units. On October 2, 2017, CONSOL converted them all into the same number of common units, ending that priority.
2018-2020: Tighter terms and a merger
The record is quiet for 2018 and 2019. Shares on issue were 27,632,824 at the end of 2019, though the beats do not explain the change from 2015 beyond the units issued above.
On June 5, 2020, the partnership amended its CONSOL credit facility again. Borrowing costs rose by 0.5 percentage points, and leverage limits were tightened in steps from 4.00x through early 2021 to 3.25x from mid-2022. New conditions were also added on investments and on distributions to unitholders, which could limit payouts.
On October 22, 2020, the partnership agreed to be acquired by its parent. Each public unit would convert into 0.73 CONSOL Energy shares, and the incentive distribution rights, which gave extra payouts to the controlling side, would be cancelled for no consideration. CONSOL Energy held 16,811,818 units, about 60.7%, and agreed to deliver its written consent, so the public vote was not the deciding factor. A final proxy document followed on November 30.
The merger closed on December 30, 2020. About 7.9 million CONSOL Energy shares were issued to public unitholders. The credit facility, with about $176.5 million outstanding, was terminated and repaid by issuing 37,322,410 new units to CONSOL Energy, ending the covenant concern. Written consents approved the deal with 23,063,876 for, 127,655 against and 10,502 abstaining. Three directors of the general partner stepped down, cutting its board from seven to four.
The units were suspended from NYSE trading, the exchange filed to remove them from listing, and on January 11, 2021 the partnership terminated their registration, ending its reporting obligation. As of that date, CONSOL Coal Resources continued as an indirect wholly owned subsidiary of CONSOL Energy, with no public holders remaining.
Written from the 10 story beats below (2015 to 11 Jan 2021), which come from the company's own announcements and filings.