There were no qualified buyers for Westmoreland Coal Co. mines this week, leaving the assets to creditors pending February court hearing.
The sale, which included the Rosebud Mine, the lone coal source for the Colstrip power plant, was intended to solicit purchase offers for Westmoreland’s mines, while creditors waited in the wings with a minimum “stalking horse” bid.
Colorado-base Westmoreland identified more than 40 parties last summer that it considered potential buyers, but no purchase offers resulted. The company filed for bankruptcy last October.
No one came forward with an acceptable offer and now creditors are positioned to take both the core assets, like Rosebud, and several non-core assets like the Absaloka mine near Crow Agency.
But the transfer to creditors is not a done deal. Westmoreland needs to convince the U.S. Bankruptcy Court, Southern District of Texas on Feb. 4 to discard the coal company’s roughly $329 million in unsecured pension and benefits obligation owed mostly to the members of United Mine Workers.
Creditors aren't interested in assuming the pension burden. UMW represents the miners at Westmoreland's mine in Kemmerer, Wyoming. There have been no objections to the pension and benefits plans attached to Westmoreland's Montana mines, although that debt is also unsecured.
You have free articles remaining.
If the court won’t allow Westmorland to cut ties to the Mine Workers’ pension and benefits debt, then the sale isn’t likely, said Kristin Cole, a Westmoreland spokesperson.
“If that’s not approved on Feb. 4, then there will be a larger reassessment,” Cole said.
Mines in the deal currently include the Absaloka, Rosebud and Savage mines in Montana, along with the coal company’s mines in Wyoming and New Mexico. The Montana mines employ 423 active union employees. An unidentified holding company has offered to buy Buckingham coal mine in Ohio and 15 other Midwestern properties.
Utilities who own the Colstrip power plant have told the court they're concerned about Westmoreland selling Rosebud mine to a buyer who won't be obligated to continue delivering coal to the power plant.
The company filed for bankruptcy Oct. 8, indicating that it had more than $1.4 billion in debt and assets of $770 million.
Montana’s state government is in the process of approving a 10-square mile expansion of Rosebud Mine, not knowing who the actual developer may be after a sale.