Westmoreland will contribute certain royalty bearing coal reserves to Oxford in return for the company’s common units.
It is expected that Oxford will have the flexibility to restart quarterly distributions at $0.2000 per common unit.
Westmoreland committed to refinance Oxford’s existing credit facilities on better terms, including additional credit capacity to fund future acquisitions.
Upon completion of the transactions, Oxford will continue to operate as a stand-alone, publicly-traded master limited partnership (MLP).
Westmoreland will hold 77% of the fully-diluted limited partner interests in Oxford.
Westmoreland Coal chief executive officer Keith Alessi said,"We have explored various ways to take advantage of the benefits of a MLP. The Oxford transactions provide us with an expeditious path to enter the MLP space and immediately recognize the advantages of owning a general partner."
Oxford president and chief executive officer Charles Ungurean said: "Since early in 2012, we have been pursuing various strategic alternatives in an effort to bring increased value to our unitholders.
"This transaction represents the culmination of that effort and we believe that this represents a great opportunity for our company, unitholders, employees and customers, as well as providing a MLP vehicle for Westmoreland and its shareholders."
