ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Friday, October 25, 1996 TAG: 9610250060
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
Coastal Corp. said Thursday that it selling its coal business in the West but will not sell its ANR Coal Co. subsidiary, which - like the Western operations - is based in Roanoke.
The Houston-based energy holding company said in February that it was selling all of its coal businesses and planned to use the proceeds to repay high-cost debt and to pursue other business opportunities.
Coastal, though, said it has reached an agreement to sell its Western operations - which consist of Utah mines and a 9 percent interest in the Los Angeles Export Terminal Co. Inc. - for $615 million in cash. The buyer is a company jointly owned by subsidiaries of Atlantic Richfield Co. of Los Angeles and Itochu Corp. of Japan.
Earlier in the year, Coastal said the estimated value of all its coal operations was $700 million to $900 million. On Thursday, a company spokesman said Coastal is "pretty pleased" with the price it got for the business.
The sale, which is expected to close by the end of the year - depending on regulatory approvals - will satisfy Coastal's financial goals, said David Arledge, the company's chief executive officer.
The Western operations have 300 million tons of coal reserves and sold 9.8 million tons last year.
Bids from potential buyers for ANR Coal, which has a history of strong profits and reserves of roughly 500 million tons, did not reflect the company's potential for continued profits and growth, Coastal said.
ANR and its subsidiaries operate mines and processing plants and sell coal from extensive reserves in Virginia, West Virginia and Kentucky. ANR also leases coal to independent producers and sells coal for other companies. ANR sold 8.2 million tons of coal last year.
Coastal has 450 employees at its operations in the East, including 50 at ANR's and Coastal Coal Sales Co.'s offices in downtown Roanoke. ANR owns coal lands and has a coal-cleaning plant near Coeburn in Wise County.
Coastal's coal operations reported sales of $459.6 million and an operating profit of $98.7 million last year. Coastal reported total sales of $10.4 billion and profit of $751 million.
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