Arch Coal, Inc. (NYSE: ACI) announced that it has sold ADDCAR Systems, L.L.C. to UGM Holdings Pty. Ltd. for a total of $21 million.
ADDCAR has been a wholly owned subsidiary of Arch Coal since the International Coal Group (ICG) acquisition in 2011. Kentucky-based ADDCAR's primary business is manufacturing, servicing and operating highwall mining equipment.
"This divestiture is consistent with our previously announced and ongoing efforts to monetize non-core assets," said John W. Eaves, president and CEO of Arch Coal, Inc. "With this sale, we are continuing to sharpen our focus on our core competencies - mining and marketing coal."
Australian-based UGM Holdings is a privately held, diversified professional services company that supports mining and related industries.
"We wish UGM success as it expands its mining expertise and reach, and we thank the employees of ADDCAR for their dedication and professionalism," said Eaves.
The sale includes all licenses, patents and technology related to the ADDCAR highwall mining system and its manufacturing facility located in Ashland, Ky. Also included in the sale are all existing contract mining and equipment lease agreements.
UGM will pay Arch $21 million during 2014 in three installments. Additional terms were not disclosed.
U.S.-based Arch Coal, Inc. is one of the world's top coal producers for the global steel and power generation industries, serving customers on five continents. Its network of mining complexes is the most diversified in the United States, spanning every major coal basin in the nation. The company controls more than 5 billion tons of high-quality metallurgical and thermal coal reserves, with access to all major railroads, inland waterways and a growing number of seaborne trade channels.
This press release contains "forward-looking statements" - that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance, and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," or "will." Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, particular uncertainties arise from changes in the demand for our coal by the domestic electric generation industry; from legislation and regulations relating to the Clean Air Act and other environmental initiatives; from operational, geological, permit, labor and weather-related factors; from fluctuations in the amount of cash we generate from operations; from future integration of acquired businesses; and from numerous other matters of national, regional and global scale, including those of a political, economic, business, competitive or regulatory nature. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law. For a description of some of the risks and uncertainties that may affect our future results, you should see the risk factors described from time to time in the reports we file with the Securities and Exchange Commission.