BRISTOL, Tenn., July 25, 2019 /PRNewswire/ -- Contura Energy,
Inc. (NYSE: CTRA), a leading U.S. coal supplier, today announced
that one or more of its subsidiaries (together, Contura) will seek
to serve as the stalking horse purchaser for certain assets offered
for sale through the bankruptcy proceedings of Blackjewel L.L.C.
and Blackjewel Holdings L.L.C. (together, Blackjewel, or the
Debtors). Specifically, Contura would acquire substantially all of
the assets of the Belle Ayr and Eagle Butte thermal coal mines in
the Powder River Basin (PRB) in Campbell
County, Wyoming, including related facilities and equipment
(Western Assets), as well as substantially all of the assets of the
S-7 Surface metallurgical coal mine, (commonly referred to as the
Pax Surface mine) in Fayette County, West
Virginia, including related facilities and equipment (Pax
Assets).
In conjunction with the proposed stalking horse bid, Contura
would provide an initial purchase deposit of $8.1 million. The purchase deposit is expected to
be used to facilitate an orderly asset sale process, as well as
cover the Debtor's near-term working capital needs and general
corporate expenses. If no superior bids are accepted, Contura
would pay an additional $12.5 million
in cash for the assets, subject to customary conditions and certain
governmental and regulatory approvals.
"Contura's divestment of these PRB assets over a year and a half
ago was a strategic decision to focus on our met-heavy eastern
asset base, and while that remains our strategic focus, our
considerations changed when Blackjewel declared bankruptcy," said
Andy Eidson, interim co-chief
executive officer. "Absent another qualified purchaser for the
assets, we have determined that the most prudent path forward is to
reacquire these mines to reestablish operations, resume safe and
responsible coal production, and bring hundreds of miners back to
work."
"As part of this proposed transaction, Contura would also
acquire a high-quality met coal mine that provides significant
value augmented by material operational synergies with our active
operations in southern West
Virginia," added interim co-chief executive officer,
Mark Manno. "Those financial
benefits, combined with our deep knowledge of the PRB assets,
motivated our decision to take a proactive role in this
process."
Pursuant to the terms of the proposed transaction, Contura would
acquire the specified assets free and clear of all liens, claims,
interests and encumbrances, and would assume no liabilities with
the exception of all reclamation obligations under applicable law
or permits and any other liabilities expressly agreed to by
Contura. The proposed purchase of these assets will be governed by
a Court-supervised process under Section 363 of the U.S. Bankruptcy
Code and is subject to Court-approved bidding procedures, including
the potential receipt of higher and better offers at auction.
If approved, upon a successful closing of the purchase of the
Western Assets specifically, Contura will endeavor to hire the
majority of the displaced Wyoming
employees associated with the Belle Ayr and Eagle Butte mines and
resume normal mining operations as soon as the company obtains the
necessary legal and regulatory approvals to do so. Employment
decisions with regard to the Pax Assets will be determined based on
development plans if and once the mine is acquired.
As previously announced, in December
2017, Contura's wholly-owned subsidiary, Contura Coal West,
LLC (Contura Coal West) completed a transaction with Blackjewel to
sell the Belle Ayr and Eagle Butte mines, along with related coal
reserves, equipment, infrastructure and other real properties.
Contura Coal West was in the final stages of the permit transfer
process for the Belle Ayr and Eagle Butte mines when, on
July 1, 2019, Blackjewel and certain
affiliated entities filed voluntary petitions for reorganization
under Chapter 11 of the U.S. Bankruptcy Code. Contura Coal West is
therefore still the permitholder in good standing for both mines
and has continued to maintain sufficient bonding with third-party
sureties to cover the reclamation and other obligations for the two
mines, as determined by the Wyoming Department of Environmental
Quality.
Together, the Belle Ayr and Eagle Butte mines produced 35.5
million tons of thermal coal in 2018 and have more than 550 million
tons in associated coal reserves.
The S-7 Surface mine, which is geographically situated near
existing Contura-affiliated operations, has approximately 3.5
million tons in associated coal reserves of High Vol A
metallurgical coal and could produce up to 0.5 million tons
annually. Contura has historically purchased raw coal from the mine
to supplement its captive met coal production.
Contura is being advised by Davis
Polk & Wardwell LLP and Ducera Partners LLC.
ABOUT CONTURA ENERGY
Contura Energy (NYSE: CTRA) is a Tennessee-based coal supplier with affiliate
mining operations across major coal basins in Pennsylvania, Virginia and West
Virginia. With customers across the globe, high-quality
reserves and significant port capacity, Contura Energy reliably
supplies both metallurgical coal to produce steel and thermal coal
to generate power. For more information, visit
www.conturaenergy.com.
FORWARD-LOOKING STATEMENTS
This news release includes forward-looking
statements. These forward-looking statements are based on
Contura's expectations and beliefs concerning future events and
involve risks and uncertainties that may cause actual results to
differ materially from current expectations. These factors are
difficult to predict accurately and may be beyond Contura's
control. Forward-looking statements in this news release or
elsewhere speak only as of the date made. New uncertainties
and risks arise from time to time, and it is impossible for Contura
to predict these events or how they may affect Contura. Except
as required by law, Contura has no duty to, and does not intend to,
update or revise the forward-looking statements in this news
release or elsewhere after the date this release is issued. In
light of these risks and uncertainties, investors should keep in
mind that results, events or developments discussed in any
forward-looking statement made in this news release may not
occur.
INVESTOR CONTACT
investorrelations@conturaenergy.com
Alex Rotonen, CFA
423.573.0396
MEDIA CONTACTS
corporatecommunications@conturaenergy.com
Rick Axthelm
423.573.0304
Emily O'Quinn
423.573.0369
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SOURCE Contura Energy, Inc.