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US coal renaissance continues as Warrior Met Coal sets terms for NYSE IPO

Published: 10:09 03 Apr 2017 EDT

Burning coal
Another coal producer, Lexington, Kentucky-based Ramaco Resources completed an IPO on February 8

The renaisance of US coal, fuelled by increased Asian demand and that President Trump will ease regulation on the industry, is set to continue with the stock market flotation of Warrior Met Coal.

The Brookwood, Alabama-based producer and exporter of metallurgical coal has set the terms of an initial public offering which is looking to raise US$364.2mln before fees.

The IPO of 16.7 mln shares is expected to be priced at between US$17 to US$19 a share, with underwriters also granted options to buy up to 2.5 min additional shares.

Credit Suisse, Citigroup and Morgan Stanley are the lead underwriters for the IPO, and the stock has been approved to list on the New York Stock Exchange under the symbol ‘HCC.’

Warrior Met consists of the former core assets of Walter Energy Inc, which filed for bankruptcy in July 2015, with an operating capacity to mine about 8 mln tons of coal a year from 300 mln tons of recoverable reserves.

The company had total adjusted revenue of US$369.0mln for the year ended December 31,2016, down from US$544.7mln a year ago, while its net loss narrowed $64.4mln from $310.6mln.

Coal prices strong …

Metallurgical coal prices have soared by about 300% this year to around US$300 a metric ton, reversing five years of pain for miners  and tempting investors back to the environmentally-unfriendly industry.

Another coal producer, Lexington, Kentucky-based Ramaco Resources Inc (NASDAQ:METC) completed an IPO on February 8, raising around US$43.7mln.

Last month Peabody Energy Corp, the world's largest private sector coal producer, said it expects to exit its Chapter 11 bankruptcy protection in early April after a US judge said he would approve its plan to slash over US$5bn of debt.

Peabody added that it plans to re-list on the stock market.

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