Utah-based Headwaters Inc. (NYSE: HW), which got started in the 1990s under another name by developing coal fines recovery plants that qualified for federal tax credits, said Jan. 18 that it completed the sale of its remaining eight coal cleaning facilities to Bowie Refined Coal LLC and its affiliates.
Proceeds from the sale include about $3.8m of cash paid at closing and approximately $10m of additional cash to be paid by the end of calendar 2013, which includes release of bond collateral. Under terms of the sale, Bowie agreed to pay Headwaters potential royalties and deferred purchase price totaling up to $43.7m over approximately eight years, subject to Bowie’s production of coal products.
Bowie also assumed certain plant liabilities, including lease and reclamation obligations. Payment of royalties and deferred purchase price based upon production is currently scheduled to begin in the latter part of calendar 2013.
As a part of the sale transaction, Headwaters committed to identifying 1 million tons of feedstock over the next 30 months for one of the facilities that was sold. Headwaters is subject to a $7/ton liability for each ton that is not identified. Headwaters said it will work actively with Bowie to secure feedstock to meet the commitment.
“We are pleased to have completed the sale of all of our coal cleaning facilities,” said Kirk Benson, Chairman and CEO of Headwaters. “In addition to eliminating a distraction from our light building products and heavy construction materials business, this transaction generates cash to further strengthen our balance sheet.”
The company didn’t identify the eight facilities sold. Notable is that these facilities are somewhat portable, so they can be moved. The company has 10 operations listed with the U.S. Mine Safety and Health Administration, with three shown as abandoned, three as active, two as nonproducing and two as temporarily idled. The three that MSHA counts as active are in Carbon County, Utah, Tuscaloosa County, Ala., and the Chinook facility in Clay County, Ind.
Headwaters didn’t say who is backing Bowie Refined Coal. That company was first listed on Jan. 18 in the U.S. Office of Surface Mining’s ownership and control database, with much of the control held by Steve Rickmeier, who is also involved in the ownership of the Bowie No. 2 longwall coal mine in Colorado.
OSM data shows that Bowie Refined Coal is 45% owned by Rickmeier Advisors Inc., 45% by Rickmeier Partners LP and 10% by Wolff Consulting. Steve Rickmeier owns 100% of Rickmeier Advisors, while two Rickmeier family trusts mainly own Rickmeier Partners. Wolff Consulting is owned by James Wolff. James Wolff has been or is involved with other coal companies like J A D Coal, Fox Knob Coal and Licking River Resources, OSM data shows.