This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Alliance To Invest Up To $525M In Coal Project

TULSA, Okla. (AP) â¿¿ Alliance Resource Partners LP said Thursday it will invest $400 million to $525 million over three or four years in a coal-mining operation under construction in Illinois.

The deal includes coal producer Alliance taking an ownership stake in White Oak Resources LLC and buying and leasing back reserves and surface rights. Alliance is investing $69.5 million at closing.

Alliance said the deal will add to earnings and distributable cash flow once production begins â¿¿ in about 2014 â¿¿ at a new mine near McLeansboro, Ill.

The company said it will invest between $150 million and $275 million for preferred stock that will give it essentially all of White Oak's distributable cash until Alliance hits an undisclosed rate of return on its investment. After that it will get rights to between 20 and 40 percent of the distributable cash generated by the project.

Alliance also will commit $140 million to acquire coal reserves, which it will lease back to White Oak for royalty payments.

The company also committed up to $110 million to buy coal-handling facilities, and it will give White Oak up to $100 million in backstop financing until White Oak can get its own financing for mining equipment.

Alliance shares fell $2.10, or 3 percent, to close at $67.97 before the White Oak deal was announced.

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs