Bankrupt James River Coal Co., after repeatedly postponing an asset auction, chose a unit of Blackhawk Mining LLC as the lead bidder, with an opening offer of $50 million.
The Blackhawk unit will be the so-called stalking horse at the auction to be held today in New York, according to papers filed in U.S. Bankruptcy Court in Richmond, Virginia. A sale hearing to consider Blackhawk’s or other possible bids is scheduled for Aug. 20 in Richmond.
Blackhawk Mining, based in Lexington, Kentucky, operates mines and coal-processing facilities. James River’s Hamden mining complexes, assets of the Logan & Kanawha Coal Co. and the Triad complex are up for sale, according to court filings. The buyer will also assume some liabilities.
James River, based in Richmond, sought bankruptcy protection from creditors April 7, listing more than $800 million in debt and $1 billion in assets. Declining coal prices caused it to idle a dozen mines.
Like others in its industry, the company is confronting a glut of coal, the switching of coal-fired electrical power plants to less expensive natural gas and increasingly costly federal regulations.
As part of its bankruptcy, James River in May won court approval to borrow as much as $110 million, over objections from unsecured creditors.
The case is In re James River Coal Co., 14-bk-31848, U.S. Bankruptcy Court, Eastern District of Virginia (Richmond).