Navajo Transitional Energy Co. (NTEC) has purchased nearly all of the assets of Cloud Peak Energy (CPE), which recently filed for bankruptcy. CPE’s primary assets include the Spring Creek mine in Montana, and the Antelope mine and Cordero Rojo mine, both in Wyoming, as well as the Sequatchie Valley reclamation project.
NTEC said CPE had “very high levels of debt” and despite solid performance at the mines, could not sustain because of that debt. “By making the purchase through the bankruptcy process, NTEC has acquired the assets free and clear of this debt burden,” NTEC said in a statement.
NTEC’s winning bid includes a $15.7 million cash payment at closing, a $40 million second lien promissory note and a five-year term royalty on future tons produced.
“This purchase is both exciting and historic,” NTEC Management Committee Chair Tim McLaughlin said. “Indian tribes have long had a deep connection to the earth, and for the first time, a tribal company will now lead thoughtful and diligent energy development on a national level.”
This purchase will make NTEC the third-largest coal producer in the U.S., according to NTEC CEO Clark Moseley. “NTEC will continue its efforts to lead conscientious energy development while striving to balance job growth and protecting the environment for future generations,” he said. “know the business and are capable of returning the Cloud Peak mines to, safe, stable and profitable operations while maintaining their excellent safety performance and reclamation efforts.”
NTEC’s annual revenue from all four mines (including Navajo) is projected to increase to more than $1 billion, Moseley said. CPE President and CEO Colin Marshall said the mines will continue to operate as normal. Subject to bankruptcy court approval, the transaction is expected to close in October.