Foresight Energy completes big coal-based financing

Foresight Energy LLC, a major Illinois coal producer founded by coal operator Chris Cline, said Aug. 23 that it has completed a $1.55bn financing.

That includes a $500m secured revolving credit facility due August 2018, a $450m secured term B loan due August 2020 and a private offering of $600m aggregate principal amount of 7.875% Senior Notes due 2021 by the company and by Foresight Energy Finance Corp.

The proceeds from this transaction will be used to refinance existing indebtedness and to fund a distribution to the company’s owners. The financing provides the company with increased liquidity and an enhanced debt maturity profile as it completes development of a fourth longwall-equipped mine in early 2014.

Morgan Stanley & Co. LLC and Citigroup Global Markets Inc. acted as joint dealer managers and solicitation agents and Global Bondholder Services Corp. acted as the tender agent and information agent for the tender offer and consent solicitation.

Foresight Energy is a leading producer of thermal coal with over three billion tons of coal reserves in the Illinois Basin. It operates four mining complexes, three of which utilize highly productive longwall mining systems and the fourth, called Shay #1, using room-and-pillar mining.

The company made two prospectus filings with the SEC last year under the name of Foresight Energy Partners LP, but that IPO never happened. One of those filings said that the four Foresight mining complexes are designed to support up to eight longwalls, with more than one longwall in some mines, giving them a combined productive capacity of up to 65 million tons of high-Btu, high-sulfur coal per year.

The four complexes, with their most recent U.S. Mine Safety and Health Administration production stats, are:

  • Shay #1, in Macoupin County, listed with MSHA under MaRyan Mining LLC, produced 323,630 tons in the first half of this year and 1.7 million tons in all of 2012.
  • MC #1, in Franklin County, under M-Class Mining LLC, produced 3.4 million tons in the first half of this year, well ahead of a pace that saw production of 4.7 million tons in all of 2012.
  • Mach #1, Williamson County, Mach Mining LLC, 3.4 million tons in the first half of this year and 7.5 million tons in all of 2012; and
  • Deer Run, Montgomery County, Patton Mining LLC, 2.8 million tons in the first half of 2013 and 2.4 million tons in all of 2012.
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.