Freepoint provides financing for eastern Kentucky coal producer

Freepoint Commodities LLC, through its subsidiary Commerce Coal LLC, said June 13 that it has closed a coal prepayment financing and off-take transaction with Covenant Coal Corp. Inc.

The transaction, which finances the growth of Covenant’s thermal coal mining operations in Pike County, Ky., represents a significant expansion of Freepoint’s merchant coal business. The transaction was completed on May 31.

“This transaction again demonstrates that Freepoint can deliver creative, streamlined solutions to commodity producers,” said David Messer, CEO of Freepoint. “Freepoint’s merchant platform positions itself at the intersection of physical commodity markets and finance. We provide a one-stop solution to customers like Covenant looking for both finance and off-take services.”

“We are very excited about this opportunity to achieve our growth plan,” said Jerry Tackett, CEO of Covenant. “With this transaction, Covenant is in an excellent position to expand the scope of its coal mining operations. We look forward to continuing our relationship with Freepoint as we begin a new phase of operations.”

Commerce Coal is a subsidiary of Freepoint Commodities, which was founded by former Sempra Energy Trading executives. Freepoint Commodities is based in Stamford, Conn., and launched multiple platforms in the energy, metals and other commodities markets starting in March 2011. Management and private equity funds managed by Stone Point Capital have provided the initial equity capital for Freepoint Commodities and its subsidiaries, including Commerce Coal, which also is based in Stamford.

Covenant Coal was founded in 2005. With its subsidiary, Freedom Coal Inc., Covenant is developing its coal mining operations in Pike County.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.