Gary White, CEO of IRP, and Joe Czul, CEO of L&K, and the entire respective management teams will become part of the combined organization.
Under the terms of the agreement, James River Coal will acquire IRP/L&K free of debt. The company has secured $375 million in committed financing from Deutsche Bank and UBS Investment Bank, which in addition to existing cash balances, is expected to be sufficient to finance the cash consideration to IRP owners. The acquisition is expected to close in the first half of 2011.
IRP operates a total of nine underground and surface coal mines in southern West Virginia and eastern Kentucky. The company’s mines produced a total of 1.9 million tons in 2010. These tons included 1.2 million tons of metallurgical coal and 700,000 tons of thermal coal. Total 2010 shipments, including coal purchased by L&K for blending purposes, were 3.7 million tons. These tons included 2.6 million tons of metallurgical coal and 1.1 million tons of thermal coal. The company has total reserves and resources of approximately 136 million tons. These tons include approximately 61 million tons of metallurgical coal reserves/resources and 75 million tons of thermal coal reserves/resources.