Coal producer Foresight Energy launches latest coal IPO

Foresight Energy LP, a major producer of Illinois coal for the power industry, said June 9 that it has commenced an initial public offering of 17,500,000 common units representing limited partner interests in Foresight Energy at a price per unit ranging between $19.00 and $21.00.

This is all under a registration statement on Form S-1 previously filed with the U.S. Securities and Exchange Commission (SEC). Foresight Energy intends to grant the underwriters a 30-day option to purchase up to an additional 2,625,000 common units to cover over-allotments, if any. The common units being offered to the public are expected to trade on the New York Stock Exchange under the symbol “FELP.”

The common units being offered to the public represent a 13.5% limited partner interest in Foresight Energy, or a 15.5% limited partner interest if the underwriters exercise, in full, their option to purchase additional common units. Foresight Reserves LP and a member of management will collectively hold an 86.5% limited partner interest in Foresight Energy, or an 84.5% limited partner interest if the underwriters exercise, in full, their option to purchase additional units.

Barclays, Citigroup, Morgan Stanley, J.P. Morgan, Goldman, Sachs & Co. and Deutsche Bank Securities are acting as joint book-running managers for the offering. Stifel, Credit Agricole CIB, PNC Capital Markets LLC and Huntington Investment Co. are acting as co-managers.

Foresight Energy, founded by coal operator Chris Cline, is a leading coal producer in the Illinois Basin with over three billion tons of coal reserves currently supporting four mining complexes. It operates three long-wall-based mining complexes in Illinois and has a fourth complex that could see a longwall installation in the future.

The company’s fourth longwall began start-up testing and operations in late May. It has submitted permits and made preliminary capital expenditures for its fifth and sixth longwalls. Foresight has sufficient assigned reserves to support up to nine longwalls, with a portion of the existing surface infrastructure, slopes and shafts available to be shared among the existing, and most of the future, longwalls.

Foresight produced, and expects to produce, 18 million tons and 24.1 million tons in 2013 and the twelve months ending June 30, 2015, respectively. The full productive capacity of the existing mines, including the new longwall, is 32.7 million tons of high-Btu, high-sulfur coal per year, and the potential future productive capacity of its operations if all nine longwalls are constructed would be 67.2 million tons per year.

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.