Advanced Emissions Solutions looks to spin off its refined coal division

Advanced Emissions Solutions (Nasdaq: ADES) announced Feb. 12 that its Board of Directors has decided to pursue the separation of the company’s Refined Coal-related business from its other Emissions Controls-related businesses.

The Board and management team have been working to evaluate financial and strategic opportunities to maximize stockholder value. The board believes that separating the Refined Coal-related business will help further this objective. The Board is working to spin-off the company’s ownership stake in Clean Coal Solutions LLC, which would result in two independent, publicly traded companies.

Refined coal is basically the addition of chemicals to coal that reduce certain emissions, like mercury, when the coal is eventually burned in a power plant.

Chris Shackelton, Chair of the Board’s Finance Committee, said: “Today’s announcement is a significant strategic step towards unlocking stockholder value and we are pleased that this process is underway.”

Dr. Michael D. Durham, President and CEO of Advanced Emissions Solutions, added: “While the Company works through this process, the management team will remain steadfastly focused on serving our customers, achieving our business objectives and regaining compliance with the Company’s periodic reporting requirements.”

A separation transaction could be finalized by early 2016. For this transaction, Moelis & Company is serving as financial advisor and Gibson, Dunn & Crutcher LLP and Fortis Law Partners LLC are serving as legal counsel to the company.

Advanced Emissions Solutions serves as the holding entity for a family of companies that provide emissions solutions in the power generation and other industries.

ADA-ES Inc. supplies Activated Carbon Injection (ACI) systems for mercury control, Dry Sorbent Injection (DSI) systems for acid gases, and technology services and other offerings in support of customers’ emissions compliance strategies. ADA’s M-Prove technology, which reduces emissions of mercury and other metals from Powder River Basin (PRB) coal, is applied directly to coal at power plants, or offered through a licensing agreement with Arch Coal (NYSE: ACI) for application at its mines. In addition, the company is developing technologies to advance cleaner energy, including CO2 emissions control technologies through projects funded by the U.S. Department of Energy and industry participants.

Clean Coal Solutions is a 42.5% owned joint venture by ADA that provides ADA’s patented Refined Coal (RC) CyClean technology to enhance combustion of and reduce emissions of NOx and mercury from coals in cyclone boilers and ADA’s patent pending M-45 and M-45-PC technologies for Circulating Fluidized boilers and Pulverized Coal boilers respectively. The Clean Coal Solutions website shows the company CEO as George McClellan, who was appointed CEO in January 2014. He has more than 35 years of experience in the coal and energy industries and is the founder and owner of Back Bay Coal Management, an energy advisory firm. He had past stints in coal marketing at companies like Enron and A.T. Massey Coal. The president of the company is Jerry Daseler, another coal industry veteran. The website said that Clean Coal Solutions is a joint venture among ADA-ES Inc., NexGen Resources Corp.Republic Financial Corp. and the Goldman Sachs Group Inc.

BCSI LLC is a custom designer and fabricator of engineered emissions control technologies, bulk material handling equipment, bulk storage systems, water/waste water treatment equipment, and custom components.

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.