Westmoreland Coal Co. will acquire the general partner of Oxford Resource Partners, which will allow it to enter the master limited partnership (MLP) space. As part of the arrangement, the company will contribute royalty-bearing coal reserves at the Kemmerer mine in Wyoming, USA. The transaction will allow Oxford to resume quarterly distributions to shareholders and refinance its existing credit facilities on better terms, including additional credit capacity to fund future acquisitions. Following these transactions, Oxford will continue to operate as a stand-alone, publicly traded MLP and Westmoreland will own 77% of Oxford.
"Westmoreland has long felt thatour long-term cost-plus and cost-protected contracts make us ideally suited fora MLP structure," said Keith E. Alessi, CEO, Westmoreland. "We have explored various ways to take advantage of thebenefits of a MLP. The Oxford trans-actions provide us with an expeditious path to enter the MLP space and immediately recognize the advantages ofowning a general partner. Additionally, the existing Oxford business has manyof the characteristics of Westmore-land's business and we feel that weare well positioned to partner with its customers."