Seeking Alpha

Consol Energy sells West Virginia assets in $3.5B deal

  • Consol Energy (CNX) agrees to sell its Consolidation Coal Company subsidiary, which contains all five of its longwall coal mines in West Virginia, to a subsidiary of Murray Energy in a deal valued at $3.5B, which CNX calls a "transformative step" in advancing its E&P growth strategy.
  • The mines being sold produced a combined 28.5M tons of thermal coal in 2012; CNX's river and dock operations, including a fleet of 21 towboats and 600 barges, are part of the transaction.
  • CNX cuts its dividend in half to an annual rate of $0.25/share, which it says reflects the increased emphasis on growth.
  • Says the deal will de-lever $2.4B in balance sheet liabilities, and expects to record ~$1.3B of pre-tax gain in Q4.
  • CNX -1.9% premarket.
Comments (2)
  • Stock probably down from the 50% cut in the dividend.
    28 Oct 2013, 08:24 AM Reply Like
  • Pretty bearish sign for coal.
    28 Oct 2013, 11:44 AM Reply Like
DJIA (DIA) S&P 500 (SPY)