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Alliance Resource Partners, L.P. and Alliance Holdings GP, L.P. Announce Elimination of IDRs and Conversion of General Partner Interest in Exchange for 56.1 Million ARLP Units; Unitholder Distribution Increased 14.3% at ARLP and 32.7% at AHGP

TULSA, Okla.--(BUSINESS WIRE)--Alliance Resource Partners, L.P. (NASDAQ: ARLP) and Alliance Holdings GP, L.P. (NASDAQ: AHGP) (collectively, the "Alliance Partnerships") jointly announced today an agreement pursuant to which AHGP's incentive distribution rights ("IDRs") in ARLP have been eliminated and its approximate one percent general partner interest in ARLP has been converted into a non-economic general partner interest, in exchange for the issuance to AHGP of 56,100,000 ARLP common units (the "Exchange Transaction"). As a result, effective today, ARLP has 130,704,217 common units outstanding and AHGP now owns 87,188,338 ARLP common units, a non-economic general partner interest in ARLP, and an approximate one percent general partner interest in ARLP's operating subsidiary, Alliance Resource Operating Partners, L.P. ("AROP ").

While both ARLP and AHGP will remain publicly traded following the Exchange Transaction, the Alliance Partnerships are positioned for a potential simplification transaction at a later date, whereby ARLP would become the sole reporting and trading entity with a substantially larger public float. Management will be evaluating the timing and structure of any such transaction, and any recommendation in this regard is subject to market and regulatory conditions, including the ultimate outcome of any tax reform currently under consideration by the U.S. Congress.

The streamlined economic structure of the Alliance Partnerships we are announcing today should contribute to improved distribution growth in both the near- and long-term and is intended to enhance value for all Alliance unitholders. Elimination of the IDRs should lower ARLP’s cost of capital and create flexibility for equity capital markets transactions by ARLP, whether in the form of additional common unit issuances or common unit repurchases. Both the board of directors of AHGP’s general partner (the "AHGP Board") and the conflicts committee of ARLP’s managing general partner (the "Conflicts Committee"), which is comprised solely of independent directors, unanimously approved the Exchange Transaction. The AHGP Board engaged Wells Fargo Securities, LLC as its financial advisor in connection with the Exchange Transaction. The Conflicts Committee engaged Robert W. Baird & Co. Incorporated as its financial advisor in connection with the Exchange Transaction. Vinson &...