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Consol Energy Proceeds With Plan to Divest From Its Coal Assets

March 06, 2017

Bloomberg News:

Consol Energy Inc. said it has hired advisers to help push ahead with plans to divest its coal business in a transaction that, people familiar with the matter say, could be worth $2.8 billion or more.

The energy company is working with Credit Suisse Group AG and Bank of America Corp. to reach out to potential buyers, including Murray Energy Corp. and Alliance Resource Partners LP, the people familiar with the situation said. Canonsburg, Pennsylvania-based Consol previously said it would consider selling or spinning off its coal operations to focus on cheaper and cleaner-burning natural gas.

Consol is still determining whether to spin off its thermal coal division as a special dividend to shareholders or sell the business outright. The company is also considering including some of its infrastructure assets in the package, which could push the valuation past the $2.8 billion estimated for the coal business alone, said the people, who asked not to be identified because the matter is private.

In a December interview at Consol headquarters, Chief Executive Officer Nicholas DeIuliis said the company’s “ready” to part ways with coal entirely and was looking for capital markets to improve enough in the coal sector to support such a move.

In 2013, Consol sold West Virginia mines to Murray Energy. Last February, it got rid of its Buchanan mine in southwestern Virginia and other metallurgical coal reserves. In July, it divested two mines to Booth Energy.

Consol’s infrastructure assets include a preparation plant, train loadout facility and a Baltimore marine terminal that exports the fossil fuel.

Consol Hires Credit Suisse, BofA to Find Buyer for Coal


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