Natural gas producer and coal miner CONSOL Energy Inc. (NYSE: CNX) said Monday morning that it has agreed to sell its Buchanan mine in West Virginia and certain other of its metallurgical coal reserves for total consideration of $420 million, including a cash payment of $398 million when the sale closes. The buyer is Coronado IV and the transaction is funded by Energy and Minerals Group (EMG), a management company serving many specialized private equity funds.
The company also said it will suspend its regular quarterly dividend (currently $0.01 per share) once the transaction closes in order to focus on growth.
CONSOL said it will use the proceeds from the transaction, which is expected to close in the first quarter of 2016, to pay down debt. At the end of December, CONSOL’s long-term debt totaled $2.75 billion.
The transaction includes a total of about 400 million tons of proved coal reserves of which about 88 million tons are associated with the Buchanan mine. The rest of the reserves are included in CONSOL’s Amonate mine in West Virginia and Virginia and greenfield coal reserves in Russell County, Va., and southwestern Pennsylvania.
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