Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, April 19, 1994 TAG: 9404190156
SECTION: BUSINESS PAGE: C-9 EDITION: METRO
SOURCE: By GREG EDWARDS STAFF WRITER
DATELINE: LENGTH: Medium
Westmoreland needed some good news. The company also reported Monday that KPMG Peat Marwick, its outside auditor, had issued a qualified opinion on the company's 1993 financial statements filed with the Securities and Exchance Commission. The opinion questioned the coal company's ability to continue as a going concern.
The auditor based its opinion on losses by the company's eastern coal operations, a working capital deficiency related to its revolving credit, and insurance company debt and violation of covenants in the company's main credit arrangements.
The auditor's report was filed with the SEC before the announcement of the sale of Westmoreland Energy.
Westmoreland, one of Virginia's largest coal producers, said the tentative buyers of its independent power and cogeneration include affiliates of Allstate Insurance Co., Energy Investors Fund II, LCRW Power Co. and Ridgewood Power Corp.
The total purchase price is still subject to accounting adjustments, but is expected to exceed $50 million plus assumption by the buyers of debts due on projects under construction.
A majority of the proceeds from the sale will be used to pay down $46 million of Westmoreland's maturing credit obligations.
Westmoreland Coal said it intends to concentrate on its core business, mining and marketing coal.
The company said it is working with its lenders to amend or restructure its loan agreements. It hopes to delay the due date of maturing credit obligations so they can be repaid with proceeds from the Westmoreland Energy sale, the company said.
Westmoreland also said it is continuing to evaluate the possible sale of its Eastern coal properties.
by CNB