Published: April 8, 2020 |

[Click image to enlarge]

During the first quarter of 2020, CONSOL Energy took several steps to reduce its outstanding indebtedness, enhance liquidity, and supplement access to capital.

“Our primary focus is on the safety and well-being of our employees,” said Jimmy Brock, president and chief executive officer of CONSOL Energy.

“Each day brings new challenges, and our team remains focused on managing for the best outcome for our employees, the company and all stakeholders. I am also pleased with the execution of our finance team. In such a tough environment, they executed a series of transactions that not only allow us to maintain high levels of liquidity on our balance sheet but also meaningfully reduce our absolute outstanding debt,” added Brock.

On the liability management front, CEIX repurchased in the open market approximately $43 million of its second lien debt that continued to trade at a significant discount to its par value. These repurchases provide a high rate of return and are credit accretive. In aggregate, when coupled with its Term Loan A, Term Loan B, and finance lease repayments during the first quarter, they retired more than $50 million in principal with no material change in liquidity from year-end 2019.

On the liquidity enhancement front, they completed multiple transactions during the quarter to provide additional sources of low-cost capital and to improve financial flexibility. First, they closed a sale-leaseback transaction on a set of longwall shields, which provided net cash proceeds of $16.3 million. The interest rate on this transaction is approximately 5.6 percent. Second, they secured a commitment to provide an additional $20 million of credit for IT infrastructure and other equipment expenditures. Finally, they successfully amended their accounts receivable securitization program, extending the maturity to March 2023 from August 2021, while keeping the size of the facility at $100 million.

CONSOL Energy and CONSOL Coal Resources Guidance Update

The coal markets have been challenging, first due to the previous softened demand from warm winter weather and additionally amidst the ongoing COVID-19 pandemic. CONSOL is monitoring the ongoing impacts of this pandemic and taking steps to mitigate the potential risks to us posed by its spread. This is a rapidly evolving situation, and they will continue to monitor developments affecting the coal markets, logistics, and end-use demand and will take additional precautions as they believe are warranted. The extent to which the COVID-19 pandemic may impact their results will depend on future developments, which are highly uncertain and cannot be predicted, including new information concerning the severity of COVID-19 and the actions taken to contain it or treat its impact, among others.

Given the ongoing uncertainty, CEIX and CONSOL Coal Resources are each withdrawing their previously announced operational and financial guidance for 2020.

About CONSOL Energy
CONSOL Energy is a Canonsburg, Pennsylvania-based producer and exporter of high-Btu bituminous thermal and crossover metallurgical coal. It owns and operates some of the most productive longwall mining operations in the Northern Appalachian Basin. Our flagship operation is the Pennsylvania Mining Complex, which has the capacity to produce approximately 28.5 million tons of coal per year and is comprised of 3 large-scale underground mines:  Bailey, Enlow Fork, and Harvey. The company also owns and operates the CONSOL Marine Terminal, which is located in the port of Baltimore and has a throughput capacity of approximately 15 million tons per year. In addition to the ~669 million reserve tons associated with the Pennsylvania Mining Complex and the ~21 million reserve tons associated with the Itmann project, the company also controls approximately 1.5 billion tons of greenfield thermal and metallurgical coal reserves located in the major coal-producing basins of the eastern United States.

To stop by CONSOL Energy’s website, CLICK HERE

About CONSOL Coal Resources
CONSOL Coal Resources is a master limited partnership formed in 2015 to manage and further develop all of CONSOL Energy Inc.‘s (NYSE: CEIX) active coal operations in Pennsylvania. CCR’s assets include a 25 percent undivided interest in, and operational control over, the Pennsylvania Mining Complex, which consists of three underground mines - Bailey, Enlow Fork and Harvey - and related infrastructure. For its ownership interest, CCR has an effective annual production capacity of 7.1 million tons of high Btu North Appalachian thermal coal.

To stop by CONSOL Coal Resources’ website, CLICK HERE

Be in-the-know when you’re on-the-go!

CLICK HERE to register your email address.

Copyright © 2020 Mining Connection LLC. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.

For licensing permission, .(JavaScript must be enabled to view this email address)