Coal news and updates

US miner Patriot Coal says Barclays-led group seeking liquidation

Patriot Coal said the planned auction Monday of its coal assets is facing a consortium of investors led by Barclays Bank seeking a liquidation of the company, which is "trying to undermine this progress" in ensuring the best outcome for workers and creditors.

"The auction follows months of constructive, good-faith discussions with multiple parties focused on achieving the best possible outcome during an unprecedented downturn in the coal industry," Patriot said in a statement.

"It is unfortunate that, on the eve of this positive development for Patriot and its stakeholders, a consortium of investors led by multinational lender Barclays Bank is trying to undermine this progress," it added.

Barclays didn't immediately provide comment on the matter when contacted in US office hours.

Patriot added that it would fight an attempt to force a liquidation by the investors.

"Their attempt to seek a liquidation of Patriot's assets is clearly a self-serving effort to benefit themselves to the detriment of 2,500 hard-working miners and all other stakeholders," it said. "The company intends to vigorously oppose the investor consortium's motion if it ever actually is heard by the Bankruptcy Court."

Patriot said it had received multiple qualified bids for substantially all of its assets and is holding a competitive auction beginning Monday, at 10 am prevailing Eastern Time at the offices of Kirkland & Ellis LLP in New York.

"We are pleased with this development and are confident the auction will result in transactions that preserve thousands of jobs in West Virginia, help ensure environmental obligations are handled in a responsible manner and maximize value for Patriot's creditors," it said.

"The winning bid(s) will be designated at the conclusion of the auction and subject to Bankruptcy Court approval at the plan confirmation hearing scheduled to begin on October 5," it added.

Blackhawk Mining had earlier agreed with Patriot to acquire the majority of the latter's assets before the auction process was announced and the initial offer was retracted.

Patriot's planned sale to Blackhawk included 12 coal mines in the Panther, Rocklick, Wells, Kanawha Eagle, Paint Creek and Midland Trail mining complexes, all in southern West Virginia.

Bids in the auction were originally scheduled for September 4, but Patriot postponed the deadline, eventually extending the bid deadline to September 18 and the auction deadline to September 21.

source: http://www.platts.com