Oxford to refinance bank debt; Westmoreland to amend or refinance debt

By Angela McDaniels

Tacoma, Wash., Oct. 16 – Oxford Resource Partners, LP plans to refinance all of its debt, and Westmoreland Coal Co. will either amend or refinance all of its debt as part of a combination of the two companies, according to a jointly issued news release.

Westmoreland agreed to acquire Oxford’s general partner, Oxford Resources GP, LLC. The acquisition is conditioned on Oxford refinancing its debt and Westmoreland either amending its existing credit facility and bond indenture or refinancing its debt.

Oxford plans to replace its $175 million of credit facilities with a $75 million first-lien term loan, a $25 million first-lien revolving credit facility and a $75 million second-lien term loan. The new loans will mature four years after closing.

The new credit agreement will also provide for $120 million of delayed-draw term loans that can be used to fund acquisitions up to 12 months after closing.

Once the delayed-draw feature expires, a $150 million accordion feature will be available to fund acquisitions during the remaining three loan years.

The cash purchase price is $30 million plus an additional $3.5 million if a specified coal acquisition is completed within one year of the purchase agreement. In addition, Westmoreland will contribute some royalty-bearing coal reserves to Oxford in return for Oxford common units.

Following these transactions, Oxford will continue to operate as a standalone, publicly traded master limited partnership and Westmoreland will own 77% of the fully diluted limited partner interests in Oxford.

As part of the transactions, the companies will change Oxford’s name to Westmoreland Resource Partners, LP and Oxford Resources GP’s name to Westmoreland Resources GP, LLC.

The debt transactions and acquisition are expected to be completed during the fourth quarter of 2014.

Westmoreland and Oxford are coal companies based in Englewood, Colo., and Columbus, Ohio, respectively.

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