Consol Energy has unveiled plans for spin-off of its Pennsylvania mining operations and other coal assets.
The American energy company had previously announced its plans to separate itself into a coal company and a natural gas exploration and production (E&P) company.
According to Consol Energy, the spin-off is aimed at giving existing shareholders ownership in two focused companies that are positioned to leverage on clear-cut opportunities for growth and profitability in the future.
Consol Energy president and CEO Nicholas J. DeIuliis said: “Today's filing represents a significant step towards completing the Company's separation, with both entities being well capitalized and free cash flow generating.
“This strategic separation will enable both businesses to focus on their inherent strengths and unlock value for their shareholders.”
As per the plans, the coal business will be made up primarily of the Pennsylvania Mining Complex, Consol’s stake in CNX Coal Resources and the coal export terminal at the Port of Baltimore. Also included in it are the undeveloped coal reserves in the Northern Appalachian, Illinois and Central Appalachian basins, and certain associated coal assets and liabilities.
The Pennsylvania Mining Complex includes the Bailey Mine, the Harvey Mine and the Enlow Fork Mine along with the associated coal preparation plant.
The coal business will be operated under the Consol Energy name post spin-off while the E&P company will get a new name later on.
Consol Energy stated that the separation of the entities will be based on meeting of certain conditions like final approval from the company’s board of directors and a declaration by the US Securities and Exchange Commission (SEC) to make the Form 10 effective.