UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION

Transcription

1 Main Document Page 1 of 15 UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION ) In re: ) Chapter 11 ) MISSION COAL COMPANY, LLC, et al., 1 ) Case No TOM11 ) Debtors. ) (Jointly Administered) ) NOTICE OF ADEQUATE ASSURANCE INFORMATION IN CONNECTION WITH THE SALE OF CERTAIN OF THE DEBTORS ASSETS PLEASE TAKE NOTICE that on December 5, 2018, the above captioned debtors and debtors in possession (collectively, the Debtors ) filed the Debtors Motion for Entry of an Order (I) Authorizing the Debtors to Enter into and Perform Under the Stalking Horse Purchase Agreement, (II) Approving Bidding Procedures for the Sale of the Debtors Assets, (III) Scheduling Hearings and Objection Deadlines with Respect to the Sale, (IV) Scheduling Bid Deadlines and an Auction, (V) Approving the Form and Manner of Notice Thereof, (VI) Approving Contract Assumption and Assignment Procedures, and (VII) Granting Related Relief [Docket No. 393] (as may be supplement, modified, or amended, the Bidding Procedures Motion ). with the United States Bankruptcy Court for the Northern District of Alabama (the Court ) seeking, among other things, entry of an order: (a) approving the bidding procedures (the Bidding Procedures ) to solicit and select the highest and otherwise best offer for the sale of certain of the Debtors assets (the Assets ) through one or more sales of the Assets (each, a Sale ); (b) scheduling an auction of the Assets (the Auction ); (c) scheduling a final hearing (the Sale Hearing ) to approve one or more Sales of the Assets; and (d) granting related relief. PLEASE TAKE FURTHER NOTICE that on December 21, 2018, the Court entered an order [Docket No. 490] (the Bidding Procedures Order ) 2 granting certain of the relief sought in the Bidding Procedures Motion, including, among other things: (a) approving the 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, include: Mission Coal Company, LLC (8465); Beard Pinnacle, LLC (0637); Oak Grove Land Company, LLC (6068); Oak Grove Resources, LLC (0300); Pinnacle Land Company, LLC (6070); Pinnacle Mining Company, LLC (7780); Seminole Alabama Mining Complex, LLC (6631); Seminole Coal Resources, LLC (1795); Seminole West Virginia Mining Complex, LLC (7858); Seneca Coal Resources, LLC (1816); and Seneca North American Coal, LLC (5102). The location of the Debtors service address is: 7 Sheridan Square, Suite 300, Kingsport, Tennessee Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Bidding Procedures Order.

2 Main Document Page 2 of 15 Bidding Procedures for the Sale of the Assets; (b) scheduling the Auction; and (c) scheduling the Sale Hearing. PLEASE TAKE FURTHER NOTICE that, in accordance with the Bidding Procedures Order, on February 27, 2019, the Debtors conducted the Auction at the offices of Kirkland & Ellis LLP, 601 Lexington Avenue, New York, New York 10022, and March 1, 2019 via telephone. PLEASE TAKE FURTHER NOTICE that on March 27, 2019, the Debtors filed the Notice of Successful Bids [Docket No. 1120], reflecting that the Maple Eagle, Seminole, and the Oak Grove mining complexes will be acquired by a newly formed entity that is 79% held by Murray Energy Corporation and 21% held by Javelin Global Commodities (UK) Ltd. 3 PLEASE TAKE FURTHER NOTICE that, pursuant to the Bidding Procedures, certain financial and commercial information demonstrating adequate assurance of future performance by the Successful Bidder is attached hereto as Exhibit A. PLEASE TAKE FURTHER NOTICE THAT the hearing at which the Court will consider the Sale (the Sale Hearing ) will commence on April 3, 2019, at 10:00 a.m., prevailing Central Time, before the Honorable Tamara O. Mitchell, at the United States Bankruptcy Court for the Northern District of Alabama, Southern Division, Courtroom #3, Robert S. Vance Federal Building, 1800 Fifth Avenue North, Birmingham, Alabama PLEASE TAKE FURTHER NOTICE that copies of the Bidding Procedures, the Bidding Procedures Order, and any other related documents are available free of charge by visiting the Debtors restructuring website at: or by calling (U.S.) or (International). You may also obtain copies of any pleadings for a fee by visiting the Court s website at [Remainder of page intentionally left blank.] 3 Additional information about the equity owners of the newly formed entity that is the proposed purchaser of the Maple Eagle, Seminole, and the Oak Grove mining complexes is set forth on Exhibit A attached hereto. 2

3 Main Document Page 3 of 15 Birmingham, Alabama Dated: April 2, 2019 /s/ Daniel D. Sparks Daniel D. Sparks Bill D. Bensinger CHRISTIAN & SMALL LLP 505 North 20th Street, Suite 1800 Birmingham, Alabama Telephone: (205) Facsimile: (205) ddsparks@csattorneys.com bdbensinger@csattorneys.com - and - James H.M. Sprayregen, P.C. Brad Weiland (admitted pro hac vice) Melissa N. Koss (admitted pro hac vice) KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 300 North LaSalle Chicago, Illinois Telephone: (312) Facsimile: (312) james.sprayregen@kirkland.com brad.weiland@kirkland.com melissa.koss@kirkland.com - and - Stephen E. Hessler, P.C. (admitted pro hac vice) Ciara Foster (admitted pro hac vice) KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 601 Lexington Avenue New York, New York Telephone: (212) Facsimile: (212) stephen.hessler@kirkland.com ciara.foster@kirkland.com Co-Counsel to the Debtors

4 Exhibit A Main Document Page 4 of 15

5 Main Document Page 5 of 15 Adequate Assurance Presentation of Murray Metallurgical Coal Holdings, LLC in connection with the sale of the Maple Eagle, Seminole, and Oak Grove Mining Complexes In re Mission Coal Company, LLC, et al. Chapter 11 Case No TOM11 April 2,

6 Main Document Page 6 of 15 Overview of the Bankruptcy Case On October 14, 2018, Mission Coal Company, LLC and certain of its affiliates (collectively, the "Debtors") filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Northern District of Alabama, Southern Division. The Debtors entered chapter 11 with plans to sell their coal mining business. On December 5, 2018, the Debtors, filed the Debtors Motion for Entry of an Order (I) Authorizing the Debtors to Enter into and Perform Under the Stalking Horse Purchase Agreement, (II) Approving Bidding Procedures for the Sale of the Debtors Assets, (III) Scheduling Hearings and Objection Deadlines with Respect to the Sale, (IV) Scheduling Bid Deadlines and an Auction, (V) Approving the Form and Manner of Notice Thereof, (VI) Approving Contract Assumption and Assignment Procedures, and (VII) Granting Related Relief [Docket No. 393]. On December 21, 2018, the Court entered the Order (I) Approving Bidding Procedures for the Sale of the Debtors Assets, (II) Scheduling Hearings and Objection Deadlines with Respect to the Sale, (III) Scheduling Bid Deadlines and an Auction, (IV) Approving the Form and Manner of Notice Thereof, (V) Approving Contract Assumption and Assignment Procedures, and (VI) Granting Related Relief [Docket No. 490] (the Bidding Procedures Order ), which, among other items, approved the bidding procedures attached thereto as Exhibit 1 (the Bidding Procedures ). 2

7 Main Document Page 7 of 15 Murray Metallurgical Selected Successful Bidder On March 27, 2019, the Debtors docketed the Notice of Successful Bids [Docket No. 1120], pursuant to which, among other things, the Debtors selected Murray Metallurgical Coal Holdings, LLC ("Murray Metallurgical") as the successful bidder for substantially all of the assets related to and required to operate the Maple Eagle, Seminole, and the Oak Grove mining complexes (collectively the "Assets"). Murray Energy Corporation ("Murray Energy") will own 79% of Murray Metallurgical. Javelin Global Commodities, an affiliate of Javelin, or an entity Javelin or Javelin's senior management team ("Javelin") causes to be formed will own the remaining 21%. A discussion of Murray Energy's and Javelin's businesses follows. The Debtors are party to an Asset Purchase Agreement with Murray Metallurgical (the "APA") with respect to the sale of the Assets. The purpose of this presentation is to provide adequate assurance of Murray Metallurgical's ability to perform its obligations under the Assumed Contracts. 3

8 Main Document Page 8 of 15 Murray Energy Corporation Murray Energy is the majority owner of the purchaser, Murray Metallurgical. Murray is the largest privately owned underground coal mining company in the United States with over 6,000 employees and 16 active coal mines. Murray has established itself as having best-in-class operating performance, including an exemplary safety record, commitment to the local communities, environmental stewardship, and consistently strong financial performance. Murray s mining assets consist of 11 underground longwall mining systems and up to 46 continuous mining units in Ohio, Illinois, Kentucky, Utah, and West Virginia, as well as 8 coal transloading facilities, 4 mining equipment manufacturing and fabrication facilities, and over 500 oil and gas wells. Murray produces approximately 76 million tons of coal annually and has approximately 4 billion saleable tons of coal in reserves. On April 16, 2015, Murray consummated a transaction (Foresight Energy Investment) with Foresight Reserves, and its related entities, to acquire an interest in Foresight Energy GP LLC ( FEGP ), and FELP (a NYSE-listed master limited partnership). On March 28, 2017, Foresight and its wholly-owned subsidiaries completed a series of transactions comprising a refinancing of certain of Foresight s indebtedness, as more fully described in Foresight s filings with the Securities and Exchange Commission, available online at These transactions resulted in Murray acquiring an additional 46% voting interest in FEGP, the general partner of Foresight, totaling an 80% voting interest in FEGP. Murray remains committed to expanding its footprint and growing profitably in a thoughtful and responsible manner. Murray has successfully acquired and integrated a number of companies and assets in the coal sector since 2013, including Consolidation Coal Company, Foresight Energy, and Colombian Natural Resources. In all of these transactions, Murray was able to successfully increase production, improve productivity, lower mining costs, and realize other synergies after transaction close. Murray also has recent experience acquiring assets out of Chapter 11 processes, having acquired certain Western Kentucky coal mines formerly owned by Armstrong Energy in February Since acquiring these assets approximately 12 months ago, Murray has successfully increased production by 20% and realized significant savings in mining costs through productivity gains and other measures. 4

9 Main Document Page 9 of 15 Javelin Since its inception in 2015, Javelin has made its mark becoming a dominant global commodities trading, logistics, operations and investment company focused on thermal coal, metallurgical coal, iron ore, oil and related markets. Using this extensive experience Javelin sets new standards and reshapes the profile of the broader commodity sector through its innovative marketing and trading approach. Javelin, one of the largest traders of coal in the US and Colombia. Javelin has built a significant metallurgical coal business based around its expertise in US financing, logistics and extensive producer network. Javelin can buy directly from producers ex-mine, ex-port or free-on-board and provide all related logistic services including rail, barge, truck and ocean freight to deliver to steel mills direct at plant. 5

10 Main Document Page 10 of 15 Murray Metallurgical Corporate Structure Overview Murray Metallurgical is a newly formed limited liability company. Murray Metallurgical owns 100% of two newly formed limited liability companies that serve as intermediate holding companies (the "HoldCos"). The HoldCos, in turn, collectively own 100% of three newly-formed limited liability companies that will operate the Assets. Under the Asset Purchase Agreement, the Debtors will transfer the Assumed Contracts to Murray Metallurgical. 6

11 Main Document Page 11 of 15 Murray Metallurgical Structure Chart 7

12 Main Document Page 12 of 15 Murray Metallurgical's Business Murray Metallurgical will be a producer of metallurgical coal, with mines in Alabama and West Virginia (collectively, the "Mining Complexes"). Murray Metallurgical will own and operate the Mining Complexes the Debtors once owned in Alabama and West Virginia, which collectively controlled over 26 million tons of proven and probable coal reserves as of September Murray Metallurgical believes that the sale will provide operational consistency to its customers and greater opportunity for coal sales into the international export markets. 8

13 Main Document Page 13 of 15 Management Services and Coal Sales Murray Energy has agreed to provide Murray Metallurgical with various services, including connection to Murray Energy's IT systems, favorable procurement contracts, access to support functions (e.g., legal, finance, labor relations, etc.), and the time of Murray Energy's executive management team. As an affiliate of Murray Energy, Murray Metallurgical will be able to draw on Murray Energy's experience as the largest privately-owned underground coal mining company in the United States, with over 6,000 employees in five States and in the Republic of Colombia, South America. Murray Energy routinely works with a large number of suppliers and contractors to ensure the safety and productivity of its Mines. Murray Energy greatly values the partnerships that we have formed and we could not have grown to the scale that we have today without these partners. Javelin will provide Murray Metallurgical with access to domestic and international metallurgical coal markets. 9

14 Main Document Page 14 of 15 Murray Metallurgical's Significant Liquidity Murray Metallurgical will have significant liquidity to operate and perform its obligations under the Assumed Contracts. Upon the closing of the sale, Murray Metallurgical will have access to a working capital facility, plus a prepayment facility that will provide, in the aggregate, up to $65 million in availability, in addition to $10 million funded as an equity contribution. 10

15 Main Document Page 15 of 15 Forward Looking Statement This presentation contains forward-looking statements within the meaning of the Securities Act of 1933, as amended and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of1995. Althoughthestatementscontainedhereinaremadeingoodfaithandtheassumptionsarebelieved to be reasonable, it is important to note that Murray Metallurgical can provide no assurance that such assumptions will be realized. No representationscanbemadeastotheaccuracy of Murray Metallurgical's ability to achieve the projected results. These statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond Murray Metallurgical's control, including achieving operating efficiencies, cost and availability of raw materials and energy, maintaining good employee relations, existing and future governmental regulations and actions of governmental bodies, general economic conditions in the markets in which Murray Metallurgical operates, industry-specific risk factors and other market and competitive conditions. Any forward-looking statements made by Murray Metallurgical speak only as of the date on which they are made. Murray Metallurgical is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, subsequent events or otherwise. Contact for Additional Information James T. Bentley Schulte Roth & Zabel LLP Telephone: (212) james.bentley@srz.com 11