Xinergy Ltd. Divests Kentucky Thermal Operations

               Xinergy Ltd. Divests Kentucky Thermal Operations

PR Newswire

KNOXVILLE, TN, Feb. 4, 2013

Toronto Stock Exchange: XRG

KNOXVILLE, TN, Feb. 4, 2013 /PRNewswire/ - Xinergy Ltd. (TSX:XRG) (the
"Company" or "Xinergy"), a Central Appalachian coal producer, today announced
that it has completed the sale of its Straight Creek and Red Bird thermal coal
mining operations (the "Sale") in Bell, Clay, Harlan, Knox and Leslie
Counties, Kentucky to affiliates of JW Resources, Inc. (the "Buyer") for
US$47.2 million in cash, subject to adjustment as provided for in a definitive
asset purchase agreement (the "Agreement") executed Friday, February 1, 2013.

Matt  Goldfarb,  Chief   Executive  Officer  of   Xinergy,  commented:   "This 
divestiture furthers our efforts to position Xinergy's asset portfolio towards
a greater  mix of  premium quality,  mid-vol metallurgical  coal  production.  
Although we continue to  view favorably the  long-term prospects for  low-cost 
Central Appalachian thermal coal mining,  we believe that this transaction  is 
both accretive to our shareholders  and value enhancing, from the  perspective 
of  enhanced  liquidity  and  operational  flexibility,  as  we  position  our 
remaining assets for significant growth."

The Sale  is considered  a "related  party transaction"  for the  purposes  of 
Multilateral Instrument 61-101 ("MI  61-101") as Jon Nix,  a greater than  10% 
shareholder of  the  Company, will  have  an approximate  5.1%  direct  and/or 
indirect ownership interest in  the Buyer at the  time of the Sale.   However, 
the Sale is not  subject to the minority  approval and valuation  requirements 
under MI 61-101 as there is an applicable exemption from these requirements as
neither the fair market value of the subject matter, nor the fair market value
of the consideration,  for the  Sale, insofar  as it  involves the  interested 
parties, exceeds 25%  of Xinergy's market  capitalization.  Mr. Nix  is not  a 
member of,  nor does  he have  representation on,  the board  of directors  of 
Xinergy.  The  Buyer's  other shareholders  are  not related  parties  to  the 
Company.

The Company's board of  directors unanimously determined that  the Sale is  in 
the best  interests of  the  Company's shareholders.   The Sale  provides  the 
Company with, among others, the following benefits:

  * Deleveraging: The Company's net debt (total debt less cash) is reduced by
    approximately 22%  from approximately $216.7 million at December 31, 2012
    to $169.5 million after receipt of the net proceeds from the Sale and the
    repayment of equipment debt;

  * Liquidity: Net proceeds from the Sale are approximately $42.7  million,
    which is net of a $3 million escrow covering indemnity claims under the
    Agreement and the repayment of approximately $4.4 million in equipment
    debt.   Approximately $38.2 million of such net proceeds, after giving
    effect to equipment debt extinguishment, transaction-related expenses and
    taxes, are anticipated to be deposited into a Collateral Proceeds Account
    pursuant to the requirements of the Indenture (the "Indenture") governing
    the Company's 9¼% Senior Secured Notes.  Based on the Company's cash
    balance of $32.2 million at December 31, 2012, after giving effect to the
    Sale the Company's liquidity profile is as follows:

Cash                    $   32.2 million
Term Loan B Commitment  $    9.8 million
          Liquidity     $   42.0 million
                                        
Restricted Cash*        $  46.0  million
                                        

* Includes approximately $38.2 million of net proceeds from the Sale.

The  Company  anticipates   paying  the  entire   $20  million  in   estimated 
infrastructure costs at its South Fork complex from the net proceeds from  the 
Sale held as restricted cash.

  * Reduced Dependence on Thermal Coal Production: The Sale substantially
    decreases the Company's dependence on CAPP thermal coal production, and
    positions the Company to benefit from a greater mix of premium quality,
    mid-vol metallurgical coal production.

The board of directors of the Company has received a fairness opinion from GMP
Securities L.P.  (the "Fairness  Opinion"), which  concluded, subject  to  the 
assumptions,  limitations  and  qualifications  described  therein,  that  the 
consideration to be received by the Company pursuant to the Sale is fair, from
a financial point of view, to the Company.  The Fairness Opinion will be filed
on SEDAR at www.sedar.com together with the material change report related  to 
this press release.

About Xinergy Ltd.

Headquartered in Knoxville, Tennessee, Xinergy Ltd., through its wholly  owned 
subsidiary Xinergy Corp. and  its subsidiaries, is engaged  in coal mining  in 
West  Virginia  and   Virginia.  Xinergy  sells   high  quality  thermal   and 
metallurgical coal to  electric utilities, steelmakers,  energy trading  firms 
and   industrial    companies.   For    more   information,    please    visit 
www.xinergycorp.com.

Cautionary Statements

This press release  contains forward-looking statements  and information  that 
are  based  on  the  beliefs  of  management  and  reflect  Xinergy's  current 
expectations.  When  used  in  this  press  release,  the  words   "estimate", 
"project", "belief",  "anticipate",  "intend",  "expect",  "plan",  "predict", 
"may" or "should" and the negative  of these words or such variations  thereon 
or comparable terminology are intended to identify forward-looking  statements 
and information. The forward-looking statements and information in this  press 
release include information relating to the  effects of the Sale on  Xinergy's 
liquidity, Xinergy's  intended use  of the  net proceeds  from the  Sale,  and 
selected fourth quarter 2012 operating  date. Such statements and  information 
reflect  the  current  view  of  the   Company  with  respect  to  risks   and 
uncertainties that may cause  actual results to  differ materially from  those 
contemplated in those forward-looking statements and information.

By their nature, forward-looking statements  involve known and unknown  risks, 
uncertainties  and  other  factors  which   may  cause  our  actual   results, 
performance  or  achievements,  or  other  future  events,  to  be  materially 
different from any  future results, performance  or achievements expressed  or 
implied by  such  forward-looking  statements.  Such  factors  include,  among 
others, completion of  Xinergy's financial  statements for  fiscal year  2012, 
which may reflect  audit-related adjustments  to the  fourth quarter  selected 
financial data  presented  in  this release,  and  developments  in  Xinergy's 
business which may impact the company's intended use of the net proceeds  from 
the Sale.

The Company  cautions that  the  foregoing list  of  material factors  is  not 
exhaustive.  When  relying   on  Xinergy's   forward-looking  statements   and 
information to make decisions, investors and others should carefully  consider 
the foregoing factors  and other uncertainties  and potential events.  Xinergy 
has assumed a  certain progression,  which may not  be realized.  It has  also 
assumed that the material factors referred  to in the previous paragraph  will 
not cause such forward-looking statements and information to differ materially
from actual results or events. However, the list of factors is not  exhaustive 
and is subject to change and there  can be no assurance that such  assumptions 
will reflect the actual outcome of such items or factors.  Please refer to the
risks outlined in  Xinergy's public  disclosure record available  on SEDAR  at 
www.sedar.com for more details.

THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS PRESS RELEASE REPRESENTS THE
EXPECTATIONS OF XINERGY AS OF THE DATE OF THIS PRESS RELEASE AND, ACCORDINGLY,
IS SUBJECT  TO  CHANGE  AFTER  SUCH  DATE.  READERS  SHOULD  NOT  PLACE  UNDUE 
IMPORTANCE ON  FORWARD-LOOKING  INFORMATION  AND SHOULD  NOT  RELY  UPON  THIS 
INFORMATION AS OF  ANY OTHER DATE.  WHILE XINERGY  MAY ELECT TO,  IT DOES  NOT 
UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME EXCEPT AS REQUIRED
IN ACCORDANCE WITH APPLICABLE LAWS. 

 

SOURCE Xinergy Ltd.

Contact:

Matt Goldfarb
Chief Executive Officer

Michael R. Castle
Chief Financial Officer

865-474-7000