Patriot Coal Files Motion Outlining Planned Sale To Blackhawk Under Chapter 11

(RTTNews) - Patriot Coal Corp. (PATCA.PK), a producer and marketer of coal, announced Wednesday that it has filed with the Bankruptcy Court a letter of intent for a proposed sale of a substantial majority of its operating assets to Blackhawk Mining, LLC, as well as a motion outlining bidding procedures.

The company said the contemplated transaction would be consummated pursuant to a chapter 11 plan and is subject to documentation of a definitive asset purchase agreement, bankruptcy court approval of the sale, confirmation of a chapter 11 plan, and other customary conditions.

Patriot's mining operations and customer shipments will continue in the ordinary course during the sale process.

Under the terms of the letter of intent, Blackhawk would issue to Patriot's secured lenders new debt securities totaling approximately $643 million plus Class B Units providing them an ownership stake in Blackhawk.

Blackhawk would also assume or replace surety bonds supporting reclamation and related liabilities associated with the purchased assets.

Patriot said it is continuing to negotiate with Blackhawk on the terms of a formal asset purchase agreement. Certain Patriot assets not included in the proposed transaction with Blackhawk will be subject to a separate sale process outlined in the bidding procedures motion filed today.