ST. LOUIS, Nov. 20, 2015 /PRNewswire/ -- Peabody Energy
(NYSE: BTU) announced today that it has entered into a definitive
agreement to sell its New Mexico
and Colorado coal assets to Bowie
Resource Partners, LLC for $358
million in cash, subject to customary working capital
adjustments. Bowie will also assume approximately
$105 million in related
liabilities. The transaction was entered into following a
competitive bidding process and includes the El Segundo and
Lee Ranch mines in New Mexico and the Twentymile Mine in
Colorado, which have combined coal
reserves1 of approximately 330 million
tons.
"This transaction is consistent with our stated focus area of
portfolio optimization. While our New Mexico and Colorado operations and workforce have been
substantial contributors to our success over the years, we are
reshaping our portfolio focus around our core regions including the
Powder River Basin, Illinois Basin
and Australia," said President and
Chief Executive Officer Glenn
Kellow. "At this time, we believe it is appropriate to
monetize the value of these mines in a transaction that would bring
forward multiple years of cash flows."
Peabody's New Mexico and
Colorado mines are projected to
produce 11 million tons in 2016. Based on Peabody's current
operating plans, pre-tax cash flows after capital expenditures for
these mines are projected to be approximately $70 million in 2016.
Transaction closing is anticipated to occur before the end of
the first quarter of 2016, subject to certain governmental and
regulatory approvals, and other customary conditions. Bowie
intends to fund the transaction through a debt refinancing and an
equity commitment from a major private equity firm.
Peabody expects to use transaction proceeds for general corporate
purposes and/or deleveraging activities. In addition, the
sale reduces the amount of Peabody's self-bonding in place for
reclamation obligations by more than $300
million. Morgan Stanley & Co. LLC is acting as the
financial advisor to Peabody.
Peabody Energy is the world's largest private-sector coal
company and a global leader in sustainable mining, energy access
and clean coal solutions. The company serves metallurgical and
thermal coal customers in more than 25 countries on six continents.
For further information, visit PeabodyEnergy.com and
AdvancedEnergyForLife.com.
Certain statements in this press release are forward-looking as
defined in the Private Securities Litigation Reform Act of 1995.
The company uses words such as "anticipate," "believe," "expect,"
"may," "forecast," "project," "should," "estimate," "plan,"
"outlook," "target," "likely," "will," "to be" or other similar
words to identify forward-looking statements. These forward-looking
statements are based on numerous assumptions that the company
believes are reasonable, but they are open to a wide range of
uncertainties and business risks that may cause actual results to
differ materially from expectations as of Nov. 20, 2015. These factors are difficult
to accurately predict and may be beyond the company's control. The
company does not undertake to update its forward-looking
statements. Factors that could affect the company's results
include, but are not limited to: supply and demand for the
company's coal products; price volatility and customer procurement
practices, particularly in international seaborne products and in
the company's trading and brokerage businesses; impact of
alternative energy sources, including, but not limited to, natural
gas and renewables; global steel demand and the downstream impact
on metallurgical coal prices; the ability to successfully complete
the sale of the company's New
Mexico and Colorado coal
assets to Bowie; impact of weather and natural disasters on demand,
production and transportation; reductions and/or deferrals of
purchases by major customers and the company's ability to renew
sales contracts; credit and performance risks associated with
customers, suppliers, contract miners, co-shippers, and trading,
banks and other financial counterparties; geologic, equipment,
permitting, site access, operational risks and new technologies
related to mining; transportation availability, performance and
costs; availability, timing of delivery and costs of key supplies,
capital equipment or commodities such as diesel fuel, steel,
explosives and tires; impact of take-or-pay agreements for rail and
port commitments for the delivery of coal; successful
implementation of business strategies, including, without
limitation, the actions we are implementing to improve our
organization and respond to current market conditions; negotiation
of labor contracts, employee relations and workforce availability;
changes in postretirement benefit and pension obligations and their
related funding requirements; replacement and development of coal
reserves; adequate liquidity to operate the business; the cost,
availability and access to capital and financial markets; ability
to appropriately secure the company's obligations for reclamation,
federal and state workers' compensation, federal coal leases and
other obligations related to our operations, including our ability
to remain eligible for self-bonding and/or successfully access the
commercial surety market; impacts of the degree to which we are
leveraged and our ability to comply with financial and other
restrictive covenants in our credit agreement; effects of changes
in interest rates and currency exchange rates (primarily the
Australian dollar); effects of acquisitions or divestitures;
economic strength and political stability of countries in which the
company has operations or serves customers; legislation,
regulations and court decisions or other government actions,
including, but not limited to, new environmental and mine safety
requirements, changes in income tax regulations, sales-related
royalties, or other regulatory taxes and changes in derivative laws
and regulations; litigation, including, but not limited to, claims
not yet assets; any additional liabilities or obligations that we
may have as a result of the Patriot Coal bankruptcy, including,
without limitation, as a result of litigation filed by third
parties in relation to that bankruptcy; terrorist attacks or
security threats, including, but not limited to, cybersecurity
threats; impacts of pandemic illnesses; and other risks detailed in
the company's reports filed with the Securities and Exchange
Commission (SEC).
________________________
|
1 Coal
reserves represent proven and probable reserves as of Dec. 31,
2014.
|
CONTACT:
Vic Svec
(314) 342-7768
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SOURCE Peabody Energy