Bankrupt coal producer Walter Energy said Feb. 12 that it closed that day the previously-announced sale of certain U.S. non-core assets to Seminole Coal Resources LLC, ERP Compliant Coke LLC and ERP Environmental Fund Inc. (collectively referred to as “Seminole”), which are all affiliates of ERP Compliant Fuels LLC (ERP) and Virginia Conservation Legacy Fund Inc. (VCLF).
Seminole has acquired Walter Energy’s assets in southern West Virginia, including the Gauley Eagle and Maple properties, as well as the Walter Coke facility and the Taft coal mining operation in Alabama. As part of the acquisition, Seminole assumes certain liabilities related to these assets. The agreement was previously approved by the U.S. Bankruptcy Court for the Northern District of Alabama in connection with a court-approved sale process.
With the close of this sale, Walter Energy’s remaining U.S. assets consist of its core Alabama coal operations. The sale of those assets to its senior lender group, represented by an entity called Coal Acquisition LLC, was also approved by the Bankruptcy Court and is expected to close in the near future.
In July 2015, Walter Energy and its U.S. subsidiaries filed for relief under chapter 11 of the U.S. Bankruptcy Code in the Bankruptcy Court for the Northern District of Alabama. The liquidation of its Canadian and United Kingdom assets is being done on separate tracks.
PJT Partners is serving as financial advisor and Paul, Weiss, Rifkind, Wharton & Garrison LLP and Bradley Arant Boult Cummings LLP are serving as legal advisors to Walter Energy.
Walter Energy has been a leading metallurgical coal producer for the global steel industry with strategic access to steel producers in Europe, Asia and South America. The company also produces thermal coal, anthracite, metallurgical coke and coal bed methane gas, with operations in the United States, Canada and the United Kingdom.
Virginia Conservation Legacy Fund is a non-profit organization seeking sustainable approaches and public awareness about natural resource use. VCLF controls over 30,000 acres of conservation land, including the Natural Bridge of Virginia. VCLF works closely with the coal industry to promote best management practices in land reclamation, reforestation, and water quality improvement. VCLF provides “environmental management services” to 459 coal mining and water quality permits in five states.
VCLF affiliate ERP Compliant Fuels seeks to promote the sale of coal, and now coke out of the Walter Coke operation in Alabama, which is bundled with carbon credits from the reforestation of Appalachian lands to reduce the rate of growth in atmospheric carbon dioxide. Coke is coal baked at high temperatures into a purified form of carbon for various uses.
With the Seminole purchase, ERP will operate one coke plant and four underground mines, including three longwalls, producing over 10 million tons of thermal and metallurgical coal annually.