Westmoreland Coal Co. will acquire the
general partner of Oxford Resource
Partners, which will allow it to enter the
master limited partnership (MLP) space.
As part of the arrangement, the company
will contribute royalty-bearing coal reserves
at the Kemmerer mine in Wyoming, USA.
The transaction will allow Oxford to resume
quarterly distributions to shareholders and
refinance its existing credit facilities on
better terms, including additional credit
capacity to fund future acquisitions.
Following these transactions, Oxford will
continue to operate as a stand-alone, publicly
traded MLP and Westmoreland will
own 77% of Oxford.
“Westmoreland has long felt that
our long-term cost-plus and cost-protected
contracts make us ideally suited for
a MLP structure,” said Keith E. Alessi,
CEO, Westmoreland. “We have explored
various ways to take advantage of the
benefits of a MLP. The Oxford transactions
provide us with an expeditious
path to enter the MLP space and immediately
recognize the advantages of
owning a general partner. Additionally,
the existing Oxford business has many
of the characteristics of Westmoreland’s
business and we feel that we
are well positioned to partner with its
customers.”
As featured in Womp 2014 Vol 12 - www.womp-int.com