Questor Management Company, and coal industry veteran Benjamin Statler, formed a new company to buy the mines called PinnOak Resources, of which Statler is also president and chief executive officer.
"We are delighted that Ben Statler approached us to partner with him in his bid to acquire these coal properties from U. S. Steel," said Michael D. Madden, the principal of Questor Management Company who was involved in the transaction.
"Questor's experience in turning non-core units of larger companies into successful stand-alone businesses makes this a natural transaction for us. Both U. S. Steel and Questor recognize that Ben Statler's prior success as a senior operating executive in the coal industry assures the smooth separation of these mines from U. S. Steel and enhances their long-term viability as commercial enterprises.”
Questor specialises in acquiring significant positions in companies that are underperforming or have not met their owners' expectations, but offer the potential for superior returns with the application of appropriate levels of capital and management expertise.
"We have assembled a great management team and we look forward to working with the present employees at the mines to create a successful company focused on coal,” Statler said. “Together we will build a company committed to the objective of mining coal safely, efficiently and at a competitive price. Our success will create the opportunity for PinnOak Resources to grow and expand."
Most of the coal produced by the two mines is purchased by U. S. Steel and third-party customers for use in the coke-and steel-making process. A portion of the coal is sold to the electric utility industry. At the closing of the transaction, U. S. Steel will enter into a multi-year supply agreement under which it is expected to purchase a significant portion of the annual production output of the two mines.
