Could a Tuscaloosa County operation be Alabama’s next publicly traded company?

Could a Tuscaloosa County operation be Alabama’s next publicly traded company?
Metallurgical coal like this mined by OAO Mechel Mining in Russia is what has Alabama-based Warrior planning a public offering that could raise as much as $3 billion. (Andrey Rudakov/Bloomberg)

Coal producer Warrior Met Coal LLC is working with bankers on a U.S. initial public offering for next year that could value the company at as much as $3 billion, according to people familiar with the matter.

The Apollo Global Management LLC-backed company is working with banks including Credit Suisse Group AG on the stock sale, which could happen as soon as the first half of 2017, said the sources, asking not to be identified. While volatility in coal prices has made it difficult to put a price on the company, it could be valued from $1 billion to $3 billion in an initial public offering, the sources said.

Warrior joins Lexington, Kentucky-based Ramaco LLC in preparing to sell shares, amid a rapid rise in coal prices over the past year.

Spokesmen for Credit Suisse and Brookwood-based Warrior declined to comment, as did Ramaco Chief Executive Officer Randall Atkins. A representative for Apollo didn’t respond to requests.

Coal rally

Metallurgical coal prices have soared about 300 percent this year to about $300 a metric ton, reversing five years of pain for miners of the steelmaking component. The rebound has been driven by increased imports to China, which has curtailed domestic production, as well as some supply issues in Australia.

The rally has breathed new life into the U.S. coal sector, helping fuel Arch Coal Inc.’s return from bankruptcy and spurring Peabody Energy Corp. to try paying off a loan early as it reorganizes.

Warrior is a producer and exporter of metallurgical coal for the global steel industry with mines across Alabama, according to its website. The company consists of the former core assets of Walter Energy Inc., which filed for bankruptcy in July 2015, with an operating capacity to mine about 8 million tons of coal a year from 300 million tons of recoverable reserves.

Walter’s bankruptcy filing was the first in a string of U.S. coal giants that sought protection from creditors, including Alpha Natural Resources Inc., Arch Coal Inc. and Peabody Energy Corp. Those companies placed big bets on metallurgical coal in 2010 and 2011, the last time the commodity fetched more than $300 a metric ton.

In addition to Apollo, Ares Management, Caspian Capital, Fidelity Investments, Franklin Mutual Advisers, GSO Capital Partners and KKR Credit Advisors are backers of Warrior, which was formerly known as Coal Acquisition LLC, according to a bankruptcy filing.

This story was written with assistance from Tim Loh. Contact the reporters at [email protected], [email protected] and [email protected].

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