David Einhorn‘s Greenlight Capital has disclosed a stake of 3.25 million shares in the newly listed CNX Coal Resources LP (NYSE:CNXC). The holding, which was acquired through both a private placement on July 7 and open market purchases, represents about 28% of the company’s outstanding shares. CNX Coal Resources LP (NYSE:CNXC) is a master limited partnership formed by CONSOL Energy Inc. (NYSE:CNX), a Fortune 500 producer of coal and natural gas, in which Einhorn holds a significant stake as well, amounting to some 20.58 million shares valued at $574.06 million and representing almost 9% of the company’s outstanding shares.
Einhorn is one of the most successful money managers of the past decade. He learnt the art of investing from Gary Siegler and Peter Collery, managers of the SC Fundamental Value Fund. He launched Greenlight Capital in 1996 and the fund currently has about $12.3 billion worth of regulatory assets under its management.
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CNX Coal Resources LP (NYSE:CNXC)’s IPO raised less equity than was earlier announced by the company. While the initial plan was to sell 10 million units between the price of $19 to $21 per unit, the final offering came at $15 per unit with 8 million units offered. Greenlight acquired the remaining 2 million units at $15 per share in the private placement. CNX Coal Resources LP (NYSE:CNXC)’s assets include a 20% undivided interest in CONSOL Energy’s Pennsylvania mining complex. Although the company plans to acquire the remaining 80% of the facility in the future in order to increase payouts to its shareholders, it is under no obligation to do so. Moreover, the mining complex generates the highest margins among its peers in the eastern United States. The average cash margin for the last fiscal year stood at $25.27 per ton, compared to an average of $14.41 for the other coal master limited partnerships. Based on the current production capacity, CNX can support over 27 years of production without developing new shafts for accessing coal seams.
