UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): March 13, 2017
 
FORESIGHT ENERGY LP
(Exact name of registrant as specified in its charter)
 
         
Delaware
 
 
 
001-36503
 
 
80-0778894
 
(State or other jurisdiction
of incorporation)
 
 
 
(Commission
File Number)
 
 
 
(IRS Employer
Identification No.)
 
 
211 North Broadway
Suite 2600
Saint Louis, MO 63102
(Address, including zip code, of principal executive offices)
 
Registrant ’ s telephone number, including area code: (314) 932-6160
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 

On March 8, 2017, Foresight Energy LP (the “ Partnership ”) announced that its wholly-owned subsidiaries Foresight Energy LLC, a Delaware limited liability company (the “ Issuer ”), and Foresight Energy Finance Corporation, a Delaware corporation (the “ Co-Issuer ” and, together with the Issuer, the “ Issuers ”), commenced a series of transactions (the “ Refinancing Transactions ”) comprising a refinancing of the following indebtedness:

● the Issuers’ Second Lien Senior Secured PIK Notes due 2021 (the “ Second Lien Notes ”);
● the Issuers’ Second Lien Senior Secured Exchangeable PIK Notes due 2017 (the “ Exchangeable PIK Notes ”); and
● the Issuer’s outstanding credit facilities (the “ Existing Credit Facilities ” and, together with the Second Lien Notes and the Exchangeable PIK Notes, the “ Existing Indebtedness ”), including the revolving credit facility (the “ Existing Revolving Credit Facility ”) and the term loan (the “ Existing Term Loan ”).

As previously disclosed, the Issuers will use, among other previously disclosed sources of funds, the proceeds from (i) the New Notes (as defined below) and (ii) a senior secured first-priority term loan (the “ New Term Loan ” and, together with the New Notes, the “ New Indebtedness ”) to refinance the Existing Indebtedness.

Item 1.01 Entry into a Material Definitive Agreement.

Note Purchase Agreement

On March 16, 2017, the Partnership, the Issuers and the wholly-owned domestic restricted subsidiaries of the Issuers that will guarantee the New Term Loan (the “ Guarantors ”), entered into a Purchase Agreement (the “ Purchase Agreement ”) with a representative of the initial purchasers named therein (collectively, the “ Initial Purchasers ”). Pursuant to the Purchase Agreement, the Initial Purchasers have agreed to purchase, and the Issuers have agreed to sell, $425.0 million aggregate principal amount of the Issuers’ 11.50% senior secured second lien notes due 2023 (the “ New Notes ”) at an issue price of 99.25%, plus accrued and unpaid interest, if any. The Initial Purchasers intend to resell the New Notes in an offering exempt from registration under the Securities Act of 1933, as amended (the “ Offering ”).

The closing of the Offering is expected to occur on March 28, 2017, and is subject to a number of conditions, including the substantially concurrent closing of the New Term Loan. The Purchase Agreement contains representations and warranties, covenants and closing conditions that are customary for transactions of this type. In addition, the Issuers and the Guarantors have agreed to indemnify the Initial Purchasers against certain liabilities on customary terms.

In the ordinary course of their various business activities, the Initial Purchasers and their respective affiliates, officers, directors and employees may purchase, sell or hold a broad array of investments and actively trade securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments for their own account and for the accounts of their customers, and such investment and trading activities may involve or relate to assets, securities and/or instruments of the Issuers (directly, as collateral securing other obligations or otherwise) and/or persons and entities with relationships with the Issuers. The Initial Purchasers and their respective affiliates may also communicate independent investment recommendations, market color or trading ideas and/or publish or express independent research views in respect of such

assets, securities or instruments and may at any time hold, or recommend to clients that they should acquire, long and/or short positions in such assets, securities and instruments.

The New Notes are being offered only to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the “ Securities Act ”), and outside the United States, only to non-U.S. investors pursuant to Regulation S. Any New Notes will not be registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent an effective registration statement or an applicable exemption from registration requirements or in a transaction not subject to the registration requirements of the Securities Act or any state securities laws. This Current Report (as defined below) does not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering, solicitation or sale would be unlawful.

Letter Agreement Amendment

On March 13, 2017, the Partnership, Foresight Reserves, LP (“ Reserves ”), certain investors in Reserves (together with Reserves, the “ Reserves Investor Group ”) and Murray Energy Corporation (“ Murray ” and, together with the Partnership and the Reserves Investor Group, the “ Parties ”) entered into the Amendment (the “ Amendment ”) to Letter Agreement, dated as of August 30, 2016 (the “ Letter Agreement ”), among the Parties. Reserves and Murray are significant equity holders in the Partnership and in the Partnership’s general partner.

In lieu of the Reserves Investor Group’s notice and certain other rights provided in the Letter Agreement, the Amendment provides that the Reserves Investor Group may participate as a lender or purchaser, as applicable, in the New Term Loan and the New Notes, and such opportunity was provided. A member of the Reserves Investor Group is expected to purchase an aggregate principal amount of up to $20.0 million of the New Notes in the offering and such purchase will be on the same terms and through the same process as other purchasers in respect of the New Notes.

The Partnership and its affiliates may not change the terms of such financing prior to the closing thereof without the consent of the Reserves Investor Group. Furthermore, the Partnership and its affiliates may not amend, replace, refinance, retire, redeem, purchase, sell, incur or issue any debt (other than trade accounts payable, letters of credit, guaranties and similar debt incurred in the ordinary course of business), except (i) in connection with the Refinancing Transactions, (ii) under the Existing Revolving Credit Facility as it exists at the time of the Amendment or (iii) under the Partnership’s accounts receivable financing facility as it exists at the time of the Amendment.

The foregoing description of the Amendment contained within this Current Report on Form 8-K (this “ Current Report ”) is qualified in its entirety by reference to the full text of the Amendment attached hereto as Exhibit 10.1 , which is incorporated herein by reference to this Current Report.

Item 8.01 Other Events.

On March 17, 2017, the Partnership issued a press release announcing the pricing of the Offering. A copy of this press release is attached as Exhibit 99.1 hereto and is incorporated by reference into this Current Report.

Cautionary Statement Regarding Forward-Looking Statements

This Current Report contains, and oral statements made from time to time by our representatives may contain, forward-looking statements regarding, among other things, our expected financial results and our expectations regarding possible financing transactions and agreements related thereto . You can identify these forward-looking statements by the use of forward-looking words such as “outlook,” “intends,” “plans,” “estimates,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “anticipates,” “foresees,” or the negative version of these words or other comparable words and phrases. Any forward-looking statement speaks only as of the date on which we make it and is based upon our historical performance and on current plans, estimates and expectations. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that the future developments affecting us will be those that we anticipate.

Our future results and financial condition may differ materially from those we currently anticipate as a result of the various factors, many of which are outside our control. Furthermore, the successful consummation of the transactions and agreements described herein on the terms described herein, or at all, is subject to, among other things, capital market conditions, agreement on principal terms between the parties, successful negotiation of definitive documentation and any conditions contained therein, all of which is not solely within our control. Other factors that could affect the foregoing include, but are not limited to, the market price for coal, the supply of, and demand for, domestic and foreign coal, competition from other coal suppliers, the cost of using the availability of other fuels, the effects of technological developments, advances in power technologies, the efficiency of our mines, the amount of coal we are able to produce from our properties, operating difficulties and unfavorable geologic conditions and other uncertainties. These factors should be read in conjunction with the risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2016 (filed with the SEC on March 1, 2017).

You are cautioned not to place undue reliance on forward-looking statements, which are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise, except as required by law.

 

Item 9.01.   Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit No.   Exhibit Description
     
10.1   Amendment to Letter Agreement, dated as of March 13, 2017 by and among Foresight Reserves, LP, for itself and as attorney in fact for the Other Investors, Murray Energy Corporation and Foresight Energy LP
99.1   Press Release, dated March 17, 2017.


 



 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

    Foresight Energy LP    
       
 

By: 

Foresight Energy GP LLC, 

 
    its general partner   
       
       
 
By:

/s/ Robert D. Moore

 
    Robert D. Moore  
    President and Chief Executive Officer  
       
 

Date: March 17, 2017

 


 

 

 

 

EXHIBIT INDEX

 

Exhibit No.   Exhibit Description
     
10.1   Amendment to Letter Agreement, dated as of March 13, 2017 by and among Foresight Reserves, LP, for itself and as attorney in fact for the Other Investors, Murray Energy Corporation and Foresight Energy LP
99.1   Press Release, dated March 17, 2017.

 

 

 

 
 

EXHIBIT 10.1

 

EXECUTION VERSION 

 

 

AMENDMENT TO LETTER AGREEMENT
This Amendment to Letter Agreement ("Amendment"), effective as of March 13, 2017 ("Effective Date"), is by and among Foresight Reserves, LP ("Reserves"), for itself and as attorney in fact for the Other Investors (collectively with Reserves, "FRLP"), Murray Energy Corporation ("MEC") and Foresight Energy, LP ("FELP"). FRLP, MEC and FELP are each a "Party" and are collectively the "Parties."
Recitals
A. The Parties previously entered into that certain letter agreement dated August 30, 2016 relating generally to refinancing the Second Lien Exchangeable PIK Notes due 2017   ("Letter Agreement").
B. The Letter Agreement may not be amended nor any provision waived or modified except by an instrument in writing signed by MEC, FELP and Reserves (on behalf of FRLP).
C. The Parties desire to enter into this Amendment to amend the Letter Agreement.
Agreement
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, the Parties agree as follows:
1. Definitions .
1.1. "FRLP Exchangeable Notes Amount" has the meaning assigned in the Letter Agreement.
1.2. "FRLP Participation Amount" means the sum of the FRLP Second Lien Notes Amount and the FRLP Exchangeable Notes Amount.
1.3. "FRLP Second Lien Notes" means the Senior Secured Second Lien PIK Notes due 2021 in an initial aggregate principal amount of $15,226,000 issued by the Issuers to FRLP pursuant to the Indenture dated August 30, 2016.
1.4. "FRLP Second Lien Notes Amount" means the sum of the initial aggregate principal amount of the FRLP Second Lien Notes plus accrued and unpaid interest thereon.
1.5. "Global Refinancing" means any transaction or series of transactions related to the refinancing of approximately $1.4 billion of debt of FELP and its subsidiaries under the terms and conditions generally described in the confidential preliminary offering circular dated March 8, 2017 ("Offering Circular").
1.6. "New First Lien Term Loan Facility" means the secured term loan facility or series of secured term loan facilities generally conforming to the "New Term Loan" described in the Offering Circular.  For the avoidance of doubt, a "New First Lien Term Loan Facility" does not include any revolving credit facility.
1.7. "New Second Lien Notes" means the second lien debt securities or series of second lien debt securities generally conforming to the Second Lien Senior Secured Notes due 2024 described in the Offering Circular.
1.8. "Term" means the period of time beginning on the Effective Date and ending on the date this Amendment is terminated as set forth herein.
2. Waiver; Indenture Election .
2.1. The Parties waive, for the duration of the Term (and, if the Global Refinancing is consummated during the Term, permanently), the requirements set forth in numbered paragraph three (3) and numbered paragraph four (4) of the Letter Agreement.
2.2. For all purposes under the Indenture (as defined in the Letter Agreement), FRLP shall be deemed to have elected to have its FRLP Exchangeable Notes redeemed for cash. For the avoidance of doubt, the preceding sentence does not affect the rights of FRLP to participate in the Global Refinancing as set forth herein or any other rights of FRLP pursuant to this Amendment.
3. FRLP Participation Right .
3.1. FRLP shall have the right, at its option, to participate, as a lender or purchaser (as the case may be), in any tranche or series of any New First Lien Term Loan Facility and any New Second Lien Notes, up to an initial aggregate principal amount not to exceed the FRLP Participation Amount.
3.2. If FRLP exercises such right, FRLP may elect to lend or purchase notes (as the case may be) under any tranche or series of any New First Lien Term Loan Facility or New Second Lien Notes up to any amount of initial principal: provided , that the aggregate amount of all principal lent and the principal amount of all notes purchased by FRLP shall not exceed the FRLP Participation Amount; provided further , that, subject to FRLP's right to elect to lend money or purchase notes, as applicable, under the terms and conditions described in this Amendment in any allocation it chooses (not to exceed, in the aggregate, the FRLP Participation Amount), FRLP’s participation as a lender or purchaser (as the case may be) shall be on the same terms as other lenders or purchasers (as the case may be) in respect of the New First Lien Term Facility or New Second Lien
 
2
Notes, as applicable, and FRLP will participate through the same process as other lenders (including by interacting with the arrangers, in the case of the New First Lien Term Facility) or other purchasers (including by purchasing through the initial purchasers, in the case of New Second Lien Notes).
3.3. FELP and MEC shall, and shall cause their respective affiliates to, exercise commercially reasonable efforts to keep FRLP reasonably informed of the terms and conditions proposed for any New First Lien Term Loan Facility and any New Second Lien Notes, which efforts shall include (i) promptly delivering to FRLP copies of all contracts and agreements (including drafts thereof) proposed to be adopted or entered into in connection with the Global Refinancing and all other documents related thereto; and (ii) permitting a representative of FRLP to be included on all market update calls and similar communications with potential lenders related to the Global Refinancing.
3.4. FRLP shall communicate an election to participate (or not participate) in any New First Lien Term Loan Facility or any New Second Lien Notes by delivering written notice (a "Participation Notice") by email (delivery receipt requested) to the email address of Robert D. Moore, which must be delivered before the deadline set by FELP and its advisors for the submission of bids from third party lenders or purchasers, as applicable, to participate in the relevant portion(s) of the Global Refinancing ("Bid Deadline"). Based on the overall marketing process for the New First Lien Term Loan Facility and New Second Lien Notes, there may be separate Bid Deadlines for each of the New First Lien Term Loan Facility and New Second Lien Notes.   Such Participation Notice shall identify the facility (or facilities) and, if applicable, the series or tranche(s) in which FRLP elects to participate and the amount of principal to be lent or principal amount of notes to be purchased (as the case may be) in connection with such election. FELP shall deliver notice of the applicable Bid Deadline to FRLP as soon as reasonably practical. Failure to deliver a Participation Notice before the Bid Deadline shall be deemed an election not to participate in the New Term Loan or New Second Lien Notes. FRLP shall also take such actions as are necessary or required by the arrangers or initial purchasers, as applicable, in respect of the New First Lien Term Loan Facility or New Second Lien Notes to receive an allocation.  FELP shall take such actions as are necessary or required by the arrangers or initial purchasers, as applicable, in respect of the New First Lien Term Loan Facility or New Second Lien Notes to ensure that FRLP receives its elected allocation with respect thereto.
 
 
3
3.5. FELP shall not, and shall cause its affiliates not to, consummate any part of the Global Refinancing unless FRLP has been afforded its participation rights in accordance with this Amendment.
3.6. If FRLP has elected to participate in a financing in accordance with this Amendment, FELP may not, and shall cause its affiliates not to, agree to any amendment, modification or change to the terms of such financing prior to the closing of the Global Refinancing without the prior written consent of FRLP.
3.7. During the Term, FELP shall not, and shall cause its affiliates not to, amend, replace, refinance, retire, redeem, purchase, sell, incur or issue any debt (other than trade accounts payable, letters of credit, guaranties and similar debt incurred in the ordinary course of business) except in connection with the Global Refinancing. For the avoidance of doubt, the foregoing sentence does not prohibit borrowing under FELP's, Foresight Energy LLC’s or their respective subsidiaries’ revolving credit facility as it exists on the date hereof or accounts receivable financing facility as it exists on the date hereof.
3.8. The Parties agree that compliance with the terms set forth in this Agreement will be deemed to satisfy all of the Parties' obligations under numbered paragraph three (3) and numbered paragraph four (4) of the Letter Agreement: provided , that if FELP complies with this Agreement and the arranger(s) or initial purchaser(s) (as the case may be) do not allocate to FRLP the amount of principal elected by FRLP to be lent or principal amount of notes elected by FRLP to be purchased (as the case may be) (not to exceed, in the aggregate, the FRLP Participation Amount), then the Parties' obligations under numbered paragraph three (3) and numbered paragraph four (4) of the Letter Agreement shall be deemed to have not been satisfied.
4. Termination .
4.1. This Amendment may be terminated by any Party by the delivery of written notice to the other Parties at any time on or after April 17, 2017.
5. Miscellaneous .
5.1. The Parties shall give such additional assurances and shall perform such additional acts, and shall cause their respective affiliates to give such additional assurances and perform such additional acts, as may be reasonable to give effect to the intent of this Amendment.
5.2. Any capitalized term used but not defined herein shall have the meaning assigned in the Letter Agreement.
 
4
5.3. Except as modified in accordance with this Amendment, the terms and conditions of the Letter Agreement shall remain in effect.
[Signature page follows]
 
 
 
 
5
IN WITNESS WHEREOF, the Parties have executed this AMENDMENT TO LETTER AGREEMENT as of the date first written above.
FORESIGHT RESERVES, LP,
for itself and as attorney in fact for the Other Investors 
   
FORESIGHT ENERGY LP 
 
      By:  Foresight Energy GP LLC, its General Partner   
         
         
/s/ Paul Vining
   
/s/ Robert D. Moore
 
Name: Paul Vining
   
Name: Robert D. Moore
 
Title:   President
   
Title:   President and Chief Executive Officer
 
         
         
MURRAY ENERGY CORPORATION         
         
         
         
/s/ Robert D. Moore 
       
Name: Robert D. Moore 
       
Title:  Executive Vice President, Chief Operating
Officer and Chief Financial Officer 
       
 
 
 
[Signature Page to Letter Agreement Amendment]
EXHIBIT 99.1
 

 
 

Foresight Energy LP Announces Pricing of

Private Notes Offering and New Credit Facilities

 

S T . L OU I S, M i ss o u r i — ( B US I N E SS W I R E) — March 17 , 20 17 — Foresight Energy LP (NYSE:FELP) today announced that its wholly owned subsidiaries, Foresight Energy LLC (the “Company”) and Foresight Energy Finance Corporation (the “Co-Issuer” and, together with the Company, the “Issuers”) have priced their previously announced offering (the “Offering”) of 11.50% Second Lien Senior Secured Notes due 2023 (the “Notes”), in an aggregate principal amount of $425 million. The Notes will be guaranteed by the wholly-owned domestic restricted subsidiaries of the Company that guarantee the Credit Facilities (as defined below). The Offering of the Notes is expected to close on or about March 28, 2017, subject to certain closing conditions.

 

In addition to the Notes, the Company also announced that it has agreed to terms on an $825 million senior secured first-priority five-year term loan (the “Term Loan”), representing an increase of $75 million from the previously announced size, and a $170 million senior secured first-priority four-year revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan, the “Credit Facilities”).

 

The aggregate principal amount of the Notes represents a $75 million decrease from the previously announced aggregate principal amount of the Notes, corresponding to the increase in the Term Loan, and the maturity of the Notes represents a one-year reduction in the previously announced maturity of the Notes.

 

The Issuers intend to use the net proceeds from the Notes and borrowings under the Term Loan, together with an equity contribution from Murray Energy Corporation and cash on hand, to refinance the following indebtedness:

 

§ the Issuers’ Second Lien Senior Secured PIK Notes due 2021;
§ the Issuers’ Second Lien Senior Secured Exchangeable PIK Notes due 2017; and
§ the Company’s outstanding credit facilities, including the revolving credit facility and the term loan.

 

The Offering will be made solely by means of a private placement either to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), or outside the United States, only to non-U.S. investors pursuant to Regulation S of the Securities Act. The Notes to be issued in the Offering have not been and will not be registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act. This press release does not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale of any security in any jurisdiction in which such offering, solicitation or sale would be unlawful.


 

F o r w a rd - L o o k ing S t a t e m e n ts

 

This press release contains, and oral statements made from time to time by representatives of Foresight Energy LP and its subsidiaries may contain, “forward-looking” statements within the meaning of the federal securities laws. Statements regarding our expected financial results, our expectations regarding possible financing transactions and agreements and other statements that contain words such as “possible,” “intend,” “will,” “if” and “expect” are forward looking and can be impacted by numerous factors, including risks relating to capital markets conditions, the impact of adverse market conditions affecting business of Foresight Energy LP or its subsidiaries, adverse changes in laws including with respect to tax and regulatory matters and other risks. There can be no assurance that actual results will not differ from those expected by management of Foresight Energy LP. Additional known material factors that could cause actual results to differ from those in the forward-looking statements are described in Part I, “Item 1A. Risk Factors” of Foresight Energy LP’s Annual Report on Form 10-K filed on March 1, 2017. Foresight Energy LP undertakes no obligation to update or revise such forward-looking statements to reflect events or circumstances that occur, or which Foresight Energy LP becomes aware of, after the date hereof.

 

Ab o ut F o re s i g ht E ner g y L P

 

F or e s i g h t E n e r g y L P is a lea d i n g prod u cer a n d m a r k eter o f t h e r m al c o al c o n t ro ll i n g o v er 2 b illi o n t o n s o f c o al r e s e r v es i n t h e I ll i n o is B a s i n . F or e s i gh t c u rr e n t l y o w n s f o u r m i n i n g c o m p l e x es ( W illi a ms o n , S ug ar C a m p , Hil l s bor o a n d M ac o u p i n ) , w i t h f o u r l o n g w a l l s ys t e ms , a n d t h e Sit r an r i v er t e r m i n a l o n t h e O h io R i v e r . F or e s i gh t ’ s op e r ati o n s a r e s t r at e g ical l y l o cated n ear mu lti p le r ail a n d r i v er t r a ns por tati o n acce s s po i n t s , pro v i d i n g t r a ns por tati o n c o s t c e r tai n t y a n d f l e x i b il it y to d i r ect sh i p m e n t s to t h e d o m e s tic a n d i n te r n ati o n al m a r k e t s .

 

C o n t a ct

 

Gary M. Broadbent

Senior Corporate Counsel and

Director of Investor and Media Relations

740-338-3100

Investor.relations@foresight.com

Media@coalsource.com