Westmoreland Enters Agreement to Sell ROVA for $5 Million in Cash
August 03 2017 - 8:00AM
Westmoreland Coal Company (Nasdaq:WLB) today announced that it has
entered into a definitive agreement to sell its Roanoke Valley
Power Facility (“ROVA”) for $5 million in cash to ROVA Venture,
LLC.
“In December 2016, we amended our ROVA contract, relieving us
from the obligation to operate the plant. This allowed us to more
aggressively pursue the sale that we are announcing today.
Additionally, we continue to anticipate the return of approximately
$10 million of cash collateral this year related to ROVA power
contracts,” said Kevin Paprzycki, Westmoreland’s Chief Executive
Officer. “Our team did a great job executing this transaction
and maximizing the realized value for the asset. This sale
and the collateral return are meaningful steps towards our 2017
goals of achieving final resolutions on our two non-core assets and
strengthening our balance sheet.”
The closing of the transaction, subject to customary terms and
conditions, is expected to occur on or before September 30,
2017. The sale includes all the assets of ROVA. Westmoreland
will retain approximately $2.7 million of reclamation liabilities
related to offsite ash storage.
About Westmoreland Coal Company
Westmoreland Coal Company is the oldest independent coal company
in the United States. Westmoreland’s coal operations include
surface coal mines in the United States and Canada, underground
coal mines in Ohio and New Mexico, a char production facility, and
a 50% interest in an activated carbon plant. Westmoreland
also owns the general partner of and a majority interest in
Westmoreland Resource Partners, LP, a publicly-traded coal master
limited partnership (NYSE:WMLP). For more information, visit
www.westmoreland.com.
Cautionary Note Regarding Forward-Looking
Statements
Forward-looking statements are based on Westmoreland’s current
expectations and assumptions regarding its business, the economy
and other future conditions. Because forward-looking
statements relate to the future, they are subject to inherent
uncertainties, risks and changes in circumstances that are
difficult to predict. Actual results may differ materially
from those contemplated by the forward-looking statements.
Westmoreland cautions you against relying on any of these
forward-looking statements. They are statements neither of
historical fact nor guarantees or assurances of future
performance. Possible events or factors that could cause
actual results or performance to differ materially from those
anticipated in Westmoreland’s forward-looking statements include,
but are not limited to the following:
- Westmoreland’s ability to consummate the sale of the ROVA and
Coal Valley facilities on reasonable terms or at all;
- existing and future legislation and regulation affecting both
Westmoreland’s coal mining operations and its customers' coal
usage, governmental policies and taxes, including those aimed at
reducing emissions of elements such as mercury, sulfur dioxides,
nitrogen oxides, particulate matter or greenhouse gases;
- the effect of the Environmental Protection Agency's and
Canadian and provincial governments' inquiries and regulations on
the operations of the power plants to which Westmoreland provides
coal;
- Alberta's Climate Leadership Plan to phase out coal-fired
electricity generation by 2030;
- Westmoreland’s substantial level of indebtedness and its
ability to adhere to financial covenants related to its borrowing
arrangements;
- Westmoreland’s relationships with, and other conditions
affecting, its customers, including how power prices affect its
customers’ decision to run their plants;
- seasonal variations and inclement weather, which may cause
fluctuations in Westmoreland’s operating results, profitability,
cash flow and working capital needs related to Westmoreland’s
operating segments;
- Westmoreland’s ability to manage the San Juan entities;
- the effect of legal and administrative proceedings,
settlements, investigations and claims, including any related to
citations and orders issued by regulatory authorities, and the
availability of related insurance coverage;
- changes in Westmoreland’s post-retirement medical benefit and
pension obligations and the impact of the recently enacted
healthcare legislation on Westmoreland’s employee health benefit
costs;
- inaccuracies in the estimates of Westmoreland’s coal
reserves;
- Westmoreland’s potential inability to expand or continue
current coal operations due to limitations in obtaining bonding
capacity for new mining permits, and/or increases in Westmoreland’s
mining costs as a result of increased bonding expenses;
- the effect of prolonged maintenance or unplanned outages at
Westmoreland’s operations or those of its major power generating
customers;
- the inability to control costs, recognize favorable tax credits
and/or receive adequate train traffic at Westmoreland’s open market
mine operations;
- the ability or inability of Westmoreland’s power hedging
arrangements to generate cash;
- competition within Westmoreland’s industry and with producers
of competing energy sources;
- the availability and costs of key supplies or commodities, such
as diesel fuel, steel and explosives;
- potential title defects or loss of leasehold interests in
Westmoreland’s properties, which could result in unanticipated
costs or an inability to mine the properties;
- and other risks, uncertainties and assumptions described in
Westmoreland’s periodic filings with the Securities and Exchange
Commission, including in "Risk Factors" in Westmoreland’s most
recent Annual Report on Form 10-K and subsequent filings.
Any forward-looking statements made by Westmoreland in this news
release speak only as of the date on which it was made.
Westmoreland undertakes no obligation to publicly update any
forward-looking statements, whether as a result of new information,
future developments or otherwise, except as may be required by
law.
For further information please contact
Gary Kohn
Chief Financial Officer
1-720-354-4467
gkohn@westmoreland.com