Diversified utility company Vectren Corp (VVC) Friday closed the sale of its coal mining subsidiary, Vectren Fuels Inc, to Sunrise Coal LLC, an Indiana-based unit of Hallador Energy Coy (HNRG). The deal was announced in July.
Prior to the sale, Vectren Fuels owned three underground coal mines in southwestern Indiana.
The sales price is $296 million in cash, plus a $24 million change in working capital and is further subject to a final working capital settlement in 90 days, the company said.
The after-tax net proceeds from the sale are estimated to be $280 million and will be used initially to retire $200 million in outstanding Vectren Capital bank term loans and to pay down outstanding short-term debt.
Vectren said that at the end of June 2014, a loss on the transaction of $20 million was recorded. After all costs related to the deal through the date of close are reflected, the final loss on the transaction is estimated to be in the range of $22 to $20 million, or $0.26 to $0.24 per share. Operating results for 2014, through the date of close, are estimated to be a loss of $2 to $1 million.
With the closure of the deal, Vectran has fully exited its nonutility commodity-related businesses.
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