Arch Coal, Inc. ACI ("Arch")
today announced that it has completed the sale of its subsidiary, Canyon Fuel
Company, LLC ("Canyon Fuel") to Bowie Resources, LLC for $423 million in cash,
which is inclusive of working capital adjustments. The sale includes the Sufco
and Skyline longwall mines, the Dugout Canyon continuous miner operation and
approximately 105 million tons of bituminous coal reserves, all located in
Utah.
"The sale of our Utah operations is advantageous for Arch and our
shareholders, allowing us to monetize assets in our portfolio that aren't core
to our long-term strategic plans," said John W. Eaves, Arch's president and
CEO. "We are pleased with the value this transaction creates, as the sale puts
Arch in a strong position for an evolving domestic coal market."
In addition to the cash proceeds received, Arch expects to record a pre-tax
gain of approximately $120 million in the third quarter of 2013 related to the
Canyon Fuel sale. Arch also forecasts cumulative capital and administrative
cost savings of more than $200 million from 2014 through 2017 due to the
divestiture of its Utah assets. Furthermore, following the Canyon Fuel
transaction, Arch anticipates further streamlining its operations to achieve
an additional $10 million in annual administrative cost reductions.
"This divestiture pulls forward multiple years of cash flows and reduces
Arch's future capital and cost outlays," said Eaves. "Moreover, the sale of
our Utah assets provides an incremental boost in liquidity, further enhancing
our financial flexibility and positioning Arch for future debt reduction as
coal markets rebound."
"I would like to thank the Utah employees for their contributions in safety,
stewardship and overall performance," said Eaves. "They have contributed
greatly to Arch's success over the past 15 years. We commend them for their
efforts and we wish them well."
Arch is retaining the West Elk mine in Colorado and approximately 300 million
tons of bituminous coal reserves in the Western Bituminous Region. Included in
that total are the Saddleback Hills and Elk Mountain reserves in southeastern
Wyoming.
"The divestiture of Canyon Fuel further streamlines our asset portfolio and
shifts our focus to the most value-enhancing parts of our business, such as
building out and upgrading our Appalachian metallurgical coal platform and
optimizing our low-cost thermal coal franchise to serve the domestic and
export coal markets," added Eaves.
U.S.-based Arch Coal, Inc. is one of the world's top coal producers for the
global steel and power generation industries, serving customers in 25
countries on five continents. Its network of mining complexes is the most
diversified in the United States, spanning every major coal basin in the
nation. The company controls more than 5 billion tons of high-quality
metallurgical and thermal coal reserves, with access to all major railroads,
inland waterways and a growing number of seaborne trade channels. For more
information, visit www.archcoal.com.
Market News and Data brought to you by Benzinga APIs© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Loading...
Posted In: NewsAsset Sales
Benzinga simplifies the market for smarter investing
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
Join Now: Free!
Already a member?Sign in