US coal supplier Contura Energy has completed its previously announced mergers with ANR and Alpha Natural Resources.
In conjunction with the transaction closing, Contura common shares were listed on the New York Stock Exchange (NYSE) and began trading immediately under the symbol CTRA.
Contura Energy CEO Kevin Crutchfield said: “The successful combination of these two sets of highly productive assets, operated by an expanded employee base of nearly 4,500 experienced and talented individuals, greatly enhances Contura’s already robust competitive positioning in both domestic and international coal markets.
“Our near-term focus now turns to delivering on the significant synergies expected through this transaction and creating additional value for Contura’s increasing number of shareholders.”
As previously announced, the combined company will continue to operate as Contura Energy and be led by Crutchfield and Contura’s existing management team.
The company’s assets are now comprised of a diversified production profile of high-quality, metallurgical and thermal coal mines in Central Appalachia, its efficient longwall thermal coal mine in Northern Appalachia, one of the largest met coal reserves in the U.S. allowing for near-term organic growth opportunities, and industry-leading export capacity through its 65 percent ownership interest in the world-class Dominion Terminal Associates (DTA) coal export facility located in Newport News, Virginia.
On a pro-forma basis for the full-year 2017, the combined entity sold approximately 11.9 million tons of metallurgical coal, making it the largest met coal supplier in the U.S., and 13.1 million tons of thermal coal, excluding sales from divested assets.
As previously announced, the transaction is expected to generate cost synergies in the range of $30 million to $50 million annually, including through coal blending and marketing optimization, as well as purchasing, operating and administrative efficiencies.
The company also announced that, concurrent with the transaction close, it completed the successful refinancing of the company’s and legacy Alpha’s senior secured credit facilities.
Specifically, a new $550 million term loan facility, with an interest rate of LIBOR plus 500bps, matures in November 2025. In addition, the company expanded its asset-backed revolving credit facility (ABL) to $225 million, which matures in April 2022.
The proceeds of the term loan facility will be used to refinance and/or retire the company’s and Alpha’s existing credit facilities, pay related fees, costs and expenses, and for general corporate purposes.
The terms of each of the ABL credit facility and the new term loan credit facility include customary representations and warranties, customary affirmative and negative covenants, and customary events of default.
In connection with the business combination, Contura was advised by Ducera Partners LLC, Davis Polk & Wardwell LLP, and Jefferies LLC, and Alpha was advised by Moelis & Company LLC and Katten Muchin Rosenman LLP.
In connection with the refinancing process, Jefferies Finance LLC, Barclays Capital, Inc., BMO Capital Markets Corp., and Citigroup Global Markets Inc. served as Joint Lead Arrangers and Joint Bookrunners.
In addition, Jefferies Finance LLC served as Administrative Agent and Collateral Agent for the marketing of the term loan facility, and Citibank, N.A. served as Administrative Agent and Collateral Agent for the marketing of the revolving credit facility.
Source: Company Press Release