James Booth has done it again. In September, his Booth Energy coal group bought a collection of Appalachian mines from a Florida utility company for nothing beyond liabilities. On Monday, it acquired another two sites in West Virginia — this time, from Consol Energy Inc. — for nothing beyond liabilities.
In fact, Consol will pay a Booth Energy unit $27 million at closing and $17 million more over four years, according to a Securities and Exchange Commission filing on Monday. Such is the state of U.S. coal markets that Consol, looking to expedite its transition from mining coal to exclusively producing natural gas, is willing to part with non-core assets for, well, nothing.
For Booth and others, coal’s bust is yielding bargains. Last winter, West Virginia’s Jim Justice paid $5 million — and assumed liabilities — to buy back mines he’d previously sold for $568 million.
To be sure, Booth will be saddled with $103 million in liabilities from his deal with Consol. Some of Consol’s cash will help Booth obtain surety bonds related to future cleanup costs, Consol Chief Financial Officer David Khani said in a phone interview.
The deal also gives Booth access to mines that are near some of his other operations that he can leverage, said Ted O’Brien, chief executive officer at Doyle Trading Consultants LLC.
For the rest of this article, click here: http://www.bloomberg.com/news/articles/2016-07-25/coal-miner-will-pay-millions-to-get-rid-of-appalachian-mines