ST. CLAIRSVILLE, Ohio, April 7, 2015 /PRNewswire/ — Murray Energy Corporation (“Murray Energy”) and Foresight Reserves, LP (“Foresight Reserves”) have announced that they have entered into a new definitive agreement, for a transaction whereby Murray Energy is expected to acquire a significant economic interest in Foresight Energy GP LLC and Foresight Energy LP (“FELP”, together with FEGP, “Foresight Energy”). The previous agreement pursuant to which Murray Energy was expected to acquire interest in Foresight Energy has been terminated. Following the closing, Mr. Christopher Cline, the founder of Foresight Energy, will maintain a sixty-six percent (66%) voting interest in FEGP and an approximate thirty-six percent (36%) economic interest in FELP and will remain actively involved as chairman of the Board of Directors of FEGP. In addition, Mr. Cline will join the board of directors of Murray Energy, upon consummation of the transaction. Mr. Robert E. Murray will remain the chairman, president, and chief executive officer of Murray Energy.

Murray Energy and Foresight Energy believe this new business partnership will lead to significant synergies as previously disclosed, which will, in turn, lead to even lower mining costs and safer operations, and will provide for future growth of both companies through integrations and future drop-downs of other assets into the public partnership. Upon consummation of the transaction, it is expected that Mr. Robert D. Moore, the chief financial officer and chief operating officer of Murray Energy, will also become the chief executive officer of Foresight Energy and join its Board of Directors.

Murray Energy will pay Foresight Reserves cash consideration of approximately $1.37 billion and will acquire:

1. a thirty-four percent (34%) (previously 80%) voting interest in FEGP, with the same seventy-seven and one half percent (77.5%) of the incentive distribution rights as provided in the prior agreement;
2. an approximately fifty percent (50%) (same as under the previous agreement) of the limited partner interest in FELP, including all of the outstanding subordinated units held by Foresight Reserves; and
3. the same access to certain other coal handling, transportation and transloading facilities as provided under the previous agreement.

Murray Energy will pay $75 million of the $1.37 billion purchase price to Foresight Reserves from the proceeds of the sale of yield producing assets by Murray Energy to FELP, which are expected to be accretive to FELP. In addition, Murray Energy will have the ability, subject to a number of material conditions, to purchase an additional forty-six (46%) percent of the voting interests in FEGP for $25 million during a five-year period.

As a result of the new transaction terms, no change of control will result under FELP credit facilities or the indenture governing FELP’s senior notes, all of which will remain in place and/or outstanding, as the case may be, after closing. In addition, Murray Energy expects to incur approximately $150 million less of indebtedness in order to consummate the transaction (as compared to the previously contemplated transaction). The transaction described herein is subject to closing conditions, including obtaining necessary financing.

IMPORTANT NOTE

This press release contains “forward-looking” statements within the meaning of the federal securities laws. These statements contain words such as “possible,” “intend,” “will,” “if” and “expect” and can be impacted by numerous factors, including risks relating to the securities markets generally, the impact of adverse market conditions affecting business of Foresight Energy or Murray Energy, the ability to achieve synergies, adverse changes in laws including with respect to tax and regulatory matters, Murray Energy’s ability to obtain necessary financing to consummation the transaction and other risks. There can be no assurance that actual results will not differ from those expected by management of Foresight Energy or Murray Energy. Foresight Energy and Murray Energy undertake no obligation to update or revise such forward-looking statements to reflect events or circumstances that occur, or which Foresight Energy or Murray Energy become aware of, after the date hereof. The closing of the transaction is subject to the satisfaction or waiver of several conditions, including receipt of proceeds from the financing activities.

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SOURCE Murray Energy Corporation