The remaining stake of 49% in the new company will be owned by secured noteholders of Armstrong Energy. Financial terms of the deal were not disclosed by any of the parties.
According to Murray Energy, the new company will produce low-chlorine, high-sulfur thermal coal with five mines in the Illinois Basin. These would include three surface mines and two operating underground mines.
The five coal mines were owned by Armstrong Energy, which had applied for bankruptcy in November 2017.
As of 30 June, 2017, the company had controlled more than 445 million tons of proven and probable coal reserves in Western Kentucky.
Murray Energy said that the new company will also be the owner and operator of three existing coal processing facilities, river dock coal handling and rail loadout facilities.
After completion of the transaction, the mines will be managed by Murray Kentucky along with the coal preparation and shipment facilities.
The transaction will ensure that the mines will be continued to be operated after the bankruptcy process as well. It is also expected to complement the existing mines of Murray Energy in the Illinois Basin.
Murray Energy chairman, president and CEO Robert E. Murray said: “This transaction will provide needed stability to the coal industry in Western Kentucky.
“It will also provide operational consistency to our domestic customers and greater opportunity for coal sales into the international export markets. This is a very important transaction for our employees, the employees of Armstrong who will join us, and our lenders and customers.”
The transaction will be subject to clearance from the United States Bankruptcy Court for the Eastern District of Missouri, which is in charge of the chapter 11 bankruptcy case of Armstrong Energy.
