Patriot Coal warns of potential layoffs at mines
Patriot Coal has warned workers at mines it plans to sell to Blackhawk Mining that there may be layoffs when the deal is closed.
Patriot expects most of the affected mines' employees will remain at the operations after Blackhawk takes over. Blackhawk is offering to buy six of Patriot's West Virginia thermal and metallurgical coal operations for $643mn in debt and equity. The companies have set a 9 October deadline for the deal to close.
Patriot sent notices to 2,681 people, according to West Virginia regulators. Patriot is undergoing a Chapter 11 bankruptcy reorganization. Blackhawk is acting as a "stalking horse" bidder, setting the floor price for the auctions of the assets it proposes to buy in the event other bidders come forward. It has agreed to buy Patriot's Kanawha Eagle, Panther, Rocklick, Paint Creek, Midland Trail and Wells mines.
The United Mine Workers of America union and certain creditors have objected to parts of Patriot's plans. That could halt or stall the transaction. Whether the sale goes through ultimately will depend on the bankruptcy court's approval, which Patriot has said is needed by 24 September.
Panther, Rocklick and Wells produce coking coal, while Midland Trail has thermal coal and Kanawha Eagle and Paint Creek produce both.
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