NEW YORK Canadian coal producer Corsa Coal Corp. has signed a binding agreement that will give Quintana Energy Partners LP a controlling stake in the company.
In addition to securing a 56-percent stake in Corsa Coal for $40 million, Houston-based Quintana will hold a redeemable 25-percent interest in Wilson Creek Energy LLC, Corsas Somerset, Pa.-based subsidiary.
Under the agreement, Corsa Coal will continue to operate under the Corsa name from its headquarters in Toronto and will assume ownership of Quintana Kopper Glo Investment LLC, Quintanas Knoxville, Tenn.-based subsidiary that operates coal mines.
A key part of the deal is the repayment of $25 million Corsa Coal owes to Toronto-based Sprott Resource Lending Corp.
"This is a major step forward for Corsa in its objective of establishing itself as a significant new United States-based supplier of metallurgical coal into the world market," Corsa Coal president and chief executive officer Don Charter said. "With the new capital provided, reduction in debt, immediate cash flow and quality coaltogether with the involvement and support of Quintana, with its experience and expertise in coalCorsa is well-positioned to continue with its sales and production growth and the development of its mining projects."
"We believe this transaction positions Corsa to execute on its long-term growth plan to be a large producer of some of the highest-quality coal in the world," Quintana managing director George Dethlefsen said.
The deal, which is subject to approval by the Toronto Stock Exchange and acceptance by Corsa Coal shareholders, is expected to be completed by July 1.
A version of this article was first published by AMM sister publication Steel First.