A federal judge has approved the sale of coal mines owned by bankrupt coal giant Blackjewel to previous owner Contura Energy, however, there remains a number of agreements that must be finalized with local and federal governments before the idled mines return to full production.
The Casper Star Tribune reported that Contura said it planned to “reinstate immediately” 500 jobs at Eagle Butte and Belle Ayr mines in Wyoming if the sale is finalized. But the sale hinges on the final approval of the federal government, after it objected to outstanding royalties and leasing terms of the Wyoming mines.
“It’s in everyone’s interest to return these properties to productive use as soon as possible,” U.S. District Judge Frank Volk said. The judge approved the sale despite myriad objections from creditors.
Contura initially offered $20.6 million on July 26 to assume ownership of three Blackjewel mines. In doing so, the company effectively became a stalking horse bidder in the sale, setting a “floor,” or base, price for the mines.
But at a three-day auction launched by Blackjewel attorneys on Aug. 1, Riverstone Credit Partners, a senior secured creditor, submitted a credit bid of $20 million for the same mines, challenging Contura’s proposal, the Casper Start Tribune reported.
The bid from Contura ultimately climbed to nearly $34 million by the auction’s close, with $24 million of that sale dedicated to Riverstone Credit Partners.
The auction ultimately brought in $54 million in total sales, including about $42 million in cash bids, according to court documents. But of that amount, only about $1.6 million will fall under the debtor’s estate, leaving a paltry amount to divide among more than 150 creditors, with priority given to senior secured creditors.
The state of Blackjewel’s finances has likely slashed any remaining hope held by creditors, some industry experts said.
A deluge of objections weighed on the sales hearing, leading the judge to institute breaks throughout the hearing to encourage negotiations between parties. The judge overruled the majority of objections made by creditors.
L&H Industrial, an equipment company with roots in Gillette, also objected to the sale but withdrew its objection after reaching a settlement with Contura on Tuesday. The company ultimately endorsed the transaction in court, cajoling the federal government to consider the benefits of bringing miners back to work and stimulating the local economy connected to the mines.
Komatsu Mining Corporation, an equipment company with multiple locations in Wyoming, filed an objection to the sale, alleging the debtors failed to provide sufficient notice to the company and attempted to transfer two equipment shovels “clear of liens.”
Source : me.smenet.org