Royal Energy Resources has purchased additional equity in Rhino Resource Partners, bringing its stake in the US coal company to 86.9%.
According to a Rhino press release, Royal was issues 60 million common units in the partnership for an initial payment of US$2 million and a promissory note payable to the partnership of US$7 million payable in three installments.
The purchase was designed to meet certain demands from Rhino’s senior secured lenders, as well as to bring Rhino back into compliance with the New York Stock Exchange’s (NYSE) continued listing requirements.
Rhino will seek relisting on the NYSE at a hearing before the NYSE Regulatory Oversight Committee on 20 April.
“Royal’s agreement to purchase additional Rhino equity demonstrates their commitment to the long-term stability and growth of the partnership,” said Joe Funk, President and CEO of Rhino’s general partner, Rhino GP LLC.
“This equity transaction also displays Rhino and Royal’s commitment to regain compliance with meeting the NYSE continued listing standards so that Rhino’s units can resume trading on the NYSE,” Funk concluded.
Under the terms of the agreement, the second and third installments of Royal’s equity purchase may be rescinded by the board of Rhino GP LLC should it determine that Rhino Resource Partners no longer need the capital. Under such circumstances, Royal would then not acquire the 13.3 million common units associated with each installment.
Rhino Resource Partners owns coal and energy-related assets in the US. It produces both metallurgical and thermal coal in a number of US coal basins, as well as leasing coal through its Elk Horn subsidiary.
Edited by Jonathan Rowland.
