The company received a portion of the purchase price in cash. Ranger, controlled by Jim Justice, assumed approximately $6.6 million of accounts payable National Coal owed to Ranger.
The sold assets include the active No. 5A underground mine, the Baldwin preparation plant, and the idled surface mine No. 3, along with the associated permits and certain liabilities.
Ranger now also holds leased mineral rights to about 22,000 acres for a royalty equal to 6-8% of applicable revenues.
“The company used the majority of the proceeds from this transaction for payment on our outstanding accounts payable and equipment debt, and to pay the $4.5 million outstanding balance owed on the short-term credit facility,” NCC president Daniel Roling said.
“In so doing, the company returned accounts payable to a more current status and terminated the short-term credit facility. These actions cured our default under the credit facility.”
Roling said the company would continue to focus on reducing outstanding debt as well as expense reduction efforts. It also is pursuing “strategic transactions” to help it repay a $42 million public debt maturing this December.
The sale was initially announced by NCC earlier this month. With the deal now complete, National’s continuing operations in Tennessee will include coal mineral and mining rights of approximately 57,000 acres of land, including one active underground and one active surface operation.
The producer will still own and operate its sole preparation plant and loadout facility in Tennessee.
As of year-end 2009, National Coal reported cash and cash equivalents of approximately $1.2 million and negative working capital of about $54.8 million.
