Attached files
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| 8-K - NATIONAL COAL CORP | fm8k-040810.htm |
EXHIBIT 99.1
NATIONAL
COAL CORP. ANNOUNCES ASSET SALES AGREEMENT
Knoxville, Tenn. – (April 12,
2010) – National Coal Corp. (Nasdaq: NCOC), a Central and Southern Appalachian
coal producer, today announced that it has entered into an agreement to sell a
portion of its assets located on the New River Tract in Eastern Tennessee for
$10 million to Ranger Energy Investments, LLC, a company controlled by Jim
Justice. The purchase price is payable in cash and the assumption by
Ranger Energy of approximately $6.0 million of accounts payable the Company owes
to an affiliate of Ranger Energy. Ranger Energy also has agreed to
lease a portion of the Company’s coal reserves also located on the New River
Tract and to purchase the Company’s coal inventory located at the Baldwin
Preparation Plant.
In
addition to our receipt of the purchase price for the assets, the Company also
will receive from Ranger Energy the return of approximately $1.9 million in cash
that was previously pledged to secure reclamation bonds and other liabilities
associated with the New River Tract operation, and payment for coal inventories
on the property at closing - which are expected to be minimal. Also,
the Company will receive from other vendors approximately $0.2 million in cash
that was previously pledged to secure services. Proceeds from the
sale will be used to repay the $4.5 million balance due under the Company’s $5.0
million short-term revolving credit facility, which currently is in
default. Any remaining proceeds will be used to repay financing
obligations for certain of the assets being sold and for other general corporate
purposes.
The
consummation of the sale is conditioned upon Ranger Energy’s purchase from
Centaurus Energy Master Fund, LP of $30.3 million of the Company’s 10.5% senior
secured notes due 2010 and the Company’s $5 million short-term revolving credit
facility, among other customary closing conditions. The transaction
is expected to close before the end of April 2010.
Daniel A.
Roling, President and CEO at National Coal Corp., explains that the sale begins
to address the Company’s short-term liquidity needs. “With this transaction, we
will be able to cure the default under our short-term revolving credit facility
by paying off and terminating the facility. The transaction also will
allow us to pay approximately $6.0 million in accounts payable to our vendors,
including an affiliate of Ranger Energy, most of whom extended us additional
credit during the first quarter of 2010 after we experienced a reduction in cash
flow following the suspension of coal purchases by our largest customer due to a
force majeure event.”
“We will
to continue to focus on ways to reduce our expenses and our outstanding debt, as
this transaction does not completely solve all of our short-term liquidity
issues. We also are continuing to pursue strategic transactions that
will allow us to repay our $42 million in public debt, which matures in December
2010,” continued Mr. Roling.
The
assets being sold include the Baldwin preparation plant, the active underground
mine number 5A, and the idled surface mine number 3, along with the associated
permits and certain liabilities. In addition, a coal contract
associated with the facilities may be assigned to the buyer. Also
included in the transaction are the coal mineral rights on approximately 22,000
acres which will be leased to Ranger Energy for a royalty of 6% to 8% of
applicable revenues.
Following
this transaction, the Company’s continuing operations in Tennessee will include
the coal mineral and mining rights to approximately 57,000 acres of land, along
with mining complexes that include one active underground mine and one active
surface mine. In addition, National Coal will continue to own and
operate one preparation plant and one unit train loading facility served by the
Norfolk Southern Railroad.
8915
George Williams Rd. Knoxville, TN
37923 865-690-6900
(phone) 865-691-9982
(fax) www.nationalcoal.com
At
December 31, 2009, the Company reported cash and cash equivalents of
approximately $1.2 million and negative working capital of approximately $54.8
million. Included in working capital at December 31, 2009 is $45.0 million of
principal amount of secured indebtedness that matures on December 15,
2010.
About
National Coal Corp.
Headquartered
in Knoxville, Tenn., National Coal Corp., through its wholly owned subsidiary,
National Coal Corporation, is engaged in coal mining in East Tennessee.
Currently, National Coal employs about 220 people. National Coal sells steam
coal to electric utilities and industrial companies in the Southeastern United
States. For more information and to sign-up for instant news alerts
visit www.nationalcoal.com.
Information
About Forward Looking Statements
This
release contains “forward-looking statements” that include information relating
to future events and future financial and operating
performance. Examples of forward looking-statements include the
Company’s efforts to address the deterioration in its financial position,
including its efforts to sell assets. Forward-looking statements
should not be read as a guarantee of future performance or results, and will not
necessarily be accurate indications of the times at, or by which, that
performance or those results will be achieved. Forward-looking statements are
based on information available at the time they are made and/or management's
good faith belief as of that time with respect to future events, and are subject
to risks and uncertainties that could cause actual performance or results to
differ materially from those expressed in or suggested by the forward-looking
statements. Important factors that could cause these differences include, but
are not limited to, the Company’s ability to satisfy the closing conditions and
consummate the asset sale, and the risks more fully described in the Company's
filings with the Securities and Exchange Commission including the Company's most
recently filed Annual Report on Form 10-K and Quarterly Reports on Form 10-Q,
which should be read in conjunction herewith for a further discussion of
important factors that could cause actual results to differ materially from
those in the forward-looking statements. Forward-looking statements speak only
as of the date they are made. You should not put undue reliance on any
forward-looking statements. We assume no obligation to update forward-looking
statements to reflect actual results, changes in assumptions or changes in other
factors affecting forward-looking information, except to the extent required by
applicable securities laws. If we do update one or more
forward-looking statements, no inference should be drawn that we will make
additional updates with respect to those or other forward-looking
statements.
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