EVANSVILLE, Ind. (AP/WTHI) — One of Indiana’s largest natural-gas utilities is selling its coal-mining subsidiary to a southern Indiana-based coal-mining company, putting more than 800 coal miners’ jobs at risk.
Evansville-based Vectren Corp. officials announced Tuesday that they’re selling Vectren Fuels to Sunrise Coal LLC for $296 million, with capital adjustments not to exceed $325 million. The sale is expected to be finalized later this year with Sunrise Coal, a subsidiary of Hollador Energy Company.
“Given our company’s emphasis on growing our infrastructure and energy services businesses, now is the right time for us to divest of these commodity-based assets. Sunrise Coal is a logical buyer that is already an active participant in the coal mining industry, specifically in the Illinois Basin and will put additional capital to work to continue to grow the overall business,” said Carl Chapman, Vectren’s chairman, president and CEO.
Vectren owns three underground coal mines in southwestern Indiana, including two mines in Oaktown, Ind., and one in Petersburg, Ind. Both Oaktown mines are operated by Black Panther Mining, LLC, while the Petersburg mine is operated by Five Star Mining, Inc. Collectively, the three mines employ approximately 850 contract miners.
Those coal-mining jobs are not guaranteed after the sale is finalized, but Vectren notes that Sunrise Coal will start the hiring process soon and that all miners currently employed will be considered for hire.
The sales price is $296 million in cash, plus an estimated $20 million change in working capital from Dec. 31, 2013, until the transaction is closed.
“I am very pleased Sunrise Coal has advised us they have already established plans to promptly conduct job fairs at which the contract miners currently employed by Black Panther and Five Star will be considered for employment at the mines. These contract miners should be very well situated given the combined workforce needs of the mines being sold by Vectren Fuels and the overall available workforce of miners in Southwest Indiana,” Chapman said. “We’re confident the transition will go smoothly for the existing customers of Vectren Fuels, including Vectren’s electric utility, and that Sunrise Coal will maintain the excellent level of service our coal customers have come to expect.”
Information from: Evansville Courier & Press, http://www.courierpress.com