Wilbur Ross - International Coal Group
Two posts on Wilbur Ross in one day. Consider it a sign of the new investment climate, where capital is moving to opportunities that would have been laughed at five years ago, and in some circles, still are.
Ross has a new venture - the International Coal Group - which has currently filed for an IPO. (Perhaps you see what I mean now about watching the International Textile Group).
International Coal (Ticker: ICO) was formed by WL Ross in May 2004 to acquire and operate coal mining facilities. The company is run by a former executive of Arch Coal (Bennett Hatfield).
Investor demand for coal can be seen in the 1Q05 IPO of Alpha Natural (Ticker: ANR), which is up ~40% from its IPO price (2/14/05).
International Coal is currently on a path of acquiring and opening coal mines. It recently paid $300mm to acquire Anker Coal Group, and also plans to buy CoalQuest for $102mm.
International Coal reported pro forma revenue of $674 million and net income of $15.4 million in 2004 (2.3% margin). ICO cited growing coal prices and increases in demand as power plants demand more fuel, more electrical generation facilities are built and the U.S. industrial sector continues its recovery.
The Wilbur Ross Formula can be seen at work here, with more details in the news article from the Daily Bankruptcy Review below. The formula: unloved, unwanted properties that the world needs more than it realizes. See also the map of US coal properties from the S-1 at bottom. - Ed
Dow Jones - Daily Bankruptcy Review:
International Coal Group Inc. plans to invest $200 million to open a new underground mine near Grafton, W.Va., according to the Associated Press Construction could begin in 2007, said Gene Kitts, senior vice president of mining services at International Coal Group. The Taylor County mine would produce about 4 million tons of coal a year and employ up to 350 people. The company, headed by New York billionaire Wilbur L. Ross, would also build a preparation plant that could process up to 2,000 tons an hour, he said. “We’re starting preliminary environmental monitoring now,” Kitts said.
International Coal Group, which is moving its headquarters to Charleston from Ashland, Ky., also expects to have about 190 million tons of coal reserves on 65,000 acres of property near Knottsville, southeast of Grafton. Ross and partners bought most of Horizon Natural Resources Co. after an August ruling by a U.S. bankruptcy judge that Horizon did not have to honor union contracts that guaranteed benefits for the miners. Hundreds of miners protested during the court hearings in Kentucky.
Kitts said ICG had an open house last month to discuss the Taylor County mine with area residents. “We’ve received nothing but encouragement from most everyone we’ve talked with in regard to this investment in Taylor County,” he said. “It is creating quite a bit of excitement.” ICG has one active mine in West Virginia: The Birch River Mine near Cowen, which employs more than 200 people. The company also operates coal mines in Kentucky, Illinois, Maryland and Pennsylvania.
Posted by: | June 29, 2007 at 05:27 PM