Rhino Resource Partners shares rise nearly 7 percent in market debut, price near top of range
By APThursday, September 30, 2010
Rhino Resource Partners shares pop in debut
NEW YORK — Shares of coal producer Rhino Resource Partners LP popped nearly 7 percent in their Thursday market debut after the coal producer priced its initial public offering near the top of its projected range.
The Lexington, Ky., limited partnership priced 3.2 million common units at $20.50 each, compared with its expected range of $19 to $21. Units started trading Thursday on the New York Stock Exchange under the symbol “RNO” and rose $1.40, or 6.8 percent, to $21.90 shortly after the market opened.
Underwriters may buy up to 486,600 more common units if demand exceeds initial supply. The offering could generate as much as $76.5 million before expenses.
Rhino Resource says it plans to use the proceeds to repay debt.
The company operates mines in Kentucky, West Virginia, Ohio and Colorado. Rhino Resource says its mines have 285.4 million tons of proven and probable coal reserves, and it makes most of its sales to electric utilities. It reported a profit of $19.5 million in 2009 and $419.8 million in revenue, and $145 million in revenue in the first half of 2010. Its coal reserves are located in Central and Northern Appalachia, the Illinois Basin, and Western Bituminous region.
Investment adviser Wexford Capital LP owns almost three-fourths of Rhino common units and has the right to appoint all members of the board of Rhino GP LLC, the company’s general partner. Wexford partner Mark Zand became the chairman of Rhino’s board of directors in January.
Rhino previously planned to go public in mid 2008 and in late 2006. Raymond James & Associates Inc. is the book-running manager for the offering. RBC Capital markets and Stifel, Nicolaus & Company Inc. are acting as co-managers for the deal.
