Patriot Coal on Sept. 7 notified its bankruptcy court that it is extending a deadline to file competing bids in two auctions for its assets, and also delaying the actual auctions.
The court in June had established Sept. 4 as the deadline for competing bids to be filed, and Sep. 9 for the auctions, which would only be held if there are any competing bids. The Sept. 7 filing said that Patriot has extended the competing bid filing deadline to Sept. 10, and the auction date to Sep. 11, with the auctions to occur at 9:00 a.m. prevailing Eastern Time at the offices of Kirkland & Ellis LLP, 601 Lexington Avenue, New York, New York 10022. Patriot didn’t offer a reason for the delays.
Patriot Coal, which has active coal mining operations in West Virginia, has been approved by the court for two “stalking horse” bid auctions for most of its assets.
The U.S. Bankruptcy Court for the Eastern District of Virginia on Aug. 21 approved the contents of the company’s latest reorganization plan and disclosure statement, clearing the way for creditor voting on those documents, which describe how the company is to be dismembered in the two parallel auction processes.
One set of assets, basically ongoing mining operations in southern West Virginia, has Blackhawk Mining LLC as the stalking horse bidder. The other set of assets, including the Federal No. 2 mine in northern West Virginia, has the Virginia Conservation Legacy Fund as the stalking horse.
Blackhawk deal includes undeveloped coal reserves, a number of coal sales agreements
On Sept. 5, Patriot Coal filed with the court an additional set of schedules that offer more details on properties to be sold in the Blackhawk deal. The mining complexes to be sold, all in southern West Virginia, are Panther, Rocklick, Wells, Kanawha Eagle, Midland Trail/Blue Creek, Paint Creek (less certain excluded assets), Logan County (less excluded assets), and all controlled river docks.
The excluded mining complexes are Federal in northern West Virginia, plus Corridor G, Jupiter and Big Mountain (except reserves covered by assumed leases) in southern West Virginia.
It is worthy of note that while Federal No. 2, the only operating Patriot Coal mine in northern West Virginia, would not be bought by Blackhawk, it does have a deal to purchase the Central Midland (centered in Lewis County) and Guffey North (centered in Taylor County) coal reserves in northern West Virginia within this overall purchase agreement. A map in the filing also shows that Blackhawk would get two coal reserves, one near Farmersburg and one near Evansville, located in Indiana, which is a state where Patriot has never mined coal since it was spun off last decade from Peabody Energy. Blackhawk would also get the Sunnyhill coal reserve in Ohio, which is another state where Patriot has never operated. Also in the deal are the Collinsville, Broughton and Rileyville coal reserves in Illinois.
Also attached is a long list of coal sales deals to be assumed by Blackhawk, including:
- Coking Coal Sales Contract between Patriot Coal Sales LLC and Gerdau Acominas S/A, dated February 2, 2012, as amended by that certain Addendum No. 1 dated July 1, 2013; as amended by that certain Addendum No. 2 dated January 1, 2014; as amended by that certain Addendum No. 3 dated April ___, 2014; and as amended by that certain Addendum No. 4 dated February 9, 2015.
- Confirmation between Patriot Coal Sales and River Trading Company LTD dated January 13, 2014; as amended by Amendment No. 1 dated December 1, 2014; and as amended by Amendment No. 2 dated March 31, 2015.
- Coal Supply Agreement by and between Patriot Coal Sales and Bayer CropScience LP dated January 1, 2014; as amended by Amendment No. 1 dated October 15, 2014.
- Purchase order by and between Patriot Coal and Patriot Coal Sales and Bayer CropScience, created January 9, 2014.
- Confirmation by and between Patriot Coal Sales and RWE Supply & Trading GmbH, dated May 13, 2014.
- Coal Purchase and Sale Agreement between Patriot Coal Sales and Trafigura AG, Branch Office Stamford, dated May 1, 2014; as amended by Amendment No. 1 dated January 28, 2015; as amended by Amendment No. 2 dated February 9, 2015.
- Confirmation between Patriot Coal Sales and Duke Energy Carolinas LLC dated August 22, 2014 (subject to Master Agreement dated December 15, 2010).
- Confirmation between Patriot Coal Sales and Vitol Inc. dated September 2, 2014.
- Purchase order by and between Patriot Coal Sales and Appalachian Power dated August 28, 2014.
- Confirmation by and between Patriot Coal Sales and Mountain Resource Sales Co. LLC dated October 21, 2014.
- OTC confirmation by and between Patriot Coal Sales and Virginia Electric and Power dated October 8, 2014 (pertaining to the Master Coal Purchase and Sale Agreement dated December 19, 2013).