Foundation Coal emerged in July after First Reserve, The Blackstone Group and American Metals and Coal International (AMCI) bought the North American assets of privately held RAG Coal International for US$975 million. First Reserve Corporation and The Blackstone Group each own 42% of Foundation while AMCI owns 15%.
The company owns a total of nine underground mines and four surface mines in the Powder River Basin, Northern Appalachia, Central Appalachia and the Illinois Basin. In the year ended December 31, 2003, it sold 67.2 million tons of coal and generated revenues of $994.3 million.
First Reserve began negotiating to buy RAG's U.S. mines in February and closed the deal July 30. The three investors put up $200 million and borrowed the rest. First Reserve and AMCI brought in Blackstone to avoid any antitrust concerns, according to The Washington Post.
By the time the deal closed coal prices, especially eastern U.S. coal prices, had surged expediting the decision to list the company earlier rather than later.
The Post reported Foundation planned to sell 23.6 million shares at between US$17 and $19, although that price could change before the offering.
This would net the company about $396 million in proceeds netting the investors $350 million for their original $200 million investment, without selling any of their stock. The shares the three investors would hold would be worth $323 million.
Foundation Coal is a major player in West Virginia, where it operates two underground mines at its Kingston complex in Fayette and Raleigh counties; three underground mines at its Laurel Creek complex in Logan and Mingo counties; an underground mine at Rockspring in Wayne County; and two surface mines at its Pioneer complex in Wyoming County.
The company's 1.8 billion tons of coal reserves include about 197.2 million tons in southern West Virginia and about 769.8 million tons of reserves in Maryland, Ohio, Pennsylvania and northern West Virginia, according to The Charleston Gazette.
The company has 2,705 employees, around 43% of whom are represented by The United Mine Workers of America.
