Massey Energy to buy some Horizon coal reserves, other assets for $10 million cash plus liabilities

By Jeff Pines

Washington, Aug. 18 - Massey Energy Co. said it agreed to buy some of Horizon Natural Resource Co.'s low-sulfur coal reserves and other assets at the company's recent auction for $10 million in cash plus the related property reclamation costs estimated to be between $30 million and $45 million.

In the auction, a group led by Wilbur Ross was the top bidder, offering $786 million plus the assumption of liabilities for Horizon's assets.

The auction results must be approved by the U.S. Bankruptcy Court for the Eastern District of Kentucky.

A hearing is scheduled for Aug. 31.

The assets Massey plans to buy are from Horizon's Starfire unit in Perry County, Ky., and Cannelton subsidiary in Kanawha County, W.Va. The assets include the low-sulfur coal reserves estimated to be 15 million to 20 million tons, two preparation plants, a barge loading facility, related infrastructure and selected mining equipment.

Closing on the transaction is expected to occur prior to Dec. 31.

Massey Energy Co., based in Richmond, Va., is the fourth largest coal company in the United States based on produced coal revenue.

Horizon filed for Chapter 11 on Nov. 13, 2002. Its Chapter 11 case number is 02-14261.

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