Form 8-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report(Date of earliest event reported):
November 30, 2000
WESTMORELAND COAL COMPANY
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(Exact name of registrant as specified in its charter)
DELAWARE 0-752 23-1128670
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(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation or organization) Number Identification No.)
2 North Cascade Avenue, 14th Floor, Colorado Springs, Colorado 80903
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code: 719-442-2600
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Item 5. Other Events
The Company announced today that three Virginia power project entities that
are 30%-owned by its wholly owned subsidiary, Westmoreland Energy, Inc., had
entered into an agreement with Dominion Virginia Power, a subsidiary of Dominion
(NYSE: D) for their sale. The Company also announced today that the previously
announced settlement between the ROVA Partnership and Dominion Virginia Power
regarding the Roanoke Valley Independent Energy Facility ("ROVA") contract
dispute has been finalized.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit 99.8 - Press release dated 11/30/00.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
WESTMORELAND COAL COMPANY
Date: Decembee 1, 2000 /s/ Robert J. Jaeger
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By: Robert J. Jaeger
Senior Vice President-Finance
and Treasurer
<PAGE>
Exhibit 99.8
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Westmoreland Enters Into Agreement To Sell
Interests In Three Virginia Cogeneration Projects;
ROVA Settlement Finalized
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Colorado Springs, CO - November 30, 2000 - Westmoreland Coal Company (AMEX: WLB)
announced today that three Virginia power project entities that are 30%-owned by
its wholly owned subsidiary, Westmoreland Energy, Inc., had entered into an
agreement with Dominion Virginia Power, a subsidiary of Dominion (NYSE: D) for
their sale. The agreement allows either party to unilaterally call for the sale
of the projects at an agreed price, at any time between January 5, 2001 and
September 30, 2001, following receipt of all regulatory approvals. The projects
include three (3) 70 MW stoker-coal cogeneration power projects located in
Altavista, Hopewell and Southampton, Virginia that began commercial operations
in 1992. Proceeds of the sale to Westmoreland's subsidiary will include its
share of the agreed sale price, plus its share of the projects' cash accounts at
closing, representing an estimated total of $23-25 million. Dominion Virginia
Power will assume the projects' contracts and debts. Closing for the transaction
is anticipated to occur during the first quarter of 2001.
W. Michael Lepchitz, President of Westmoreland Energy, Inc. said, "We are
pleased that the parties agreed with the benefits of a sale to Dominion Virginia
Power, and have cooperated in the discussions to reach an agreement.
Westmoreland has benefited from the operation of these projects over the past
years and we appreciate the dedication of the project personnel."
"We believe this transaction will deliver a higher value to our shareholders
than continued operation under existing power supply and project financing
terms," commented Christopher K. Seglem, Westmoreland Coal Company Chairman,
President and CEO. "As demonstrated in the past, Westmoreland will sell assets
when opportunities to achieve higher returns for our shareholders appear to be
present. Moreover, the proceeds from this transaction can directly support
implementation of the strategic plan presented to our shareholders last April,"
added Seglem.
Westmoreland Coal Company also reported today that the previously announced
settlement between the ROVA Partnership and Dominion Virginia Power regarding
the Roanoke Valley Independent Energy Facility ("ROVA") contract dispute has
been finalized. The ROVA Partnership is a 50/50 partnership between Westmoreland
Energy, Inc., a wholly owned subsidiary of Westmoreland Coal Company and LG&E
Power Inc., a wholly owned subsidiary of LG&E Energy Corp. (NYSE: LGE). The
settlement is part of a larger restructuring of the contracts between the
parties and provides a cash payment to the ROVA Partnership, modifies the power
purchase agreement to align the interests of and provide incentives for both the
ROVA Partnership and Dominion Virginia Power and resolves past operating issues
with regard to how forced outage days are treated. Westmoreland has not
previously recognized any revenues on its 50% portion of the capacity payments
withheld by Dominion Virginia Power. The cash portion of the settlement is
anticipated to increase Westmoreland's net income for the fourth quarter 2000 by
$14.9 million and increase cash by $13.9 million. In addition, the greater
operational flexibility afforded by the revised power purchase agreement and the
elimination of the controversy associated with the continuation of capacity
payments on forced outage days are expected to improve future operational ROVA
Partnership earnings by $1.0-2.0 million per year, of which 50% would be
recognized by Westmoreland.
Westmoreland Coal Company, headquartered in Colorado Springs, is the oldest
independent coal company in the United States. It is implementing a strategic
plan for expansion and growth through the acquisition and development of coal,
gas and power opportunities in the changing energy marketplace. With over $200
million in available tax loss carryforwards (NOLs), the Company hopes to enjoy
near pre-tax levels of cash flow from profitable operations. Westmoreland has
made several announcements recently relative to its progress in this regard. The
Company has announced an agreement to acquire Montana Power Company's coal
business for $138 million and an agreement to acquire the coal operations of
Knife River Corporation for $28.8 million. The Company's existing operations
include Powder River Basin coal mining through its 80%-owned subsidiary
Westmoreland Resources, Inc. and independent power production through its wholly
owned subsidiary Westmoreland Energy, Inc. The Company also holds a 20% interest
in Dominion Terminal Associates, a coal shipping and terminal facility in
Newport News, Virginia.
Certain statements in this press release which are not historical
facts or information are "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. Any statements contained
herein that are not statements of historical fact may be deemed to be
forward-looking statements. For example, words such as "may," "will,"
"should," "estimates," "predicts," "potential," "continue,"
"strategy," "believes," "anticipates," "plans," "expects," "intends,"
and similar expressions are intended to identify forward-looking
statements. Such forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause the actual
results, levels of activity, performance or achievements of the
Westmoreland Coal Company, or industry results, to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by such forward-looking statements.
Such factors include, among others, the following: general economic
and business conditions; the ability of the Company to implement its
business strategy; the Company's access to financing; the Company's
ability to successfully identify new business opportunities; the
Company's ability to achieve anticipated cost savings and
profitability targets; changes in the industry; competition; the
Company's ability to utilize its tax net operating losses; the ability
to reinvest excess cash at an acceptable rate of return; weather
conditions; the availability of transportation; price of alternative
fuels; costs of coal produced by other countries; demand for
electricity; the effect of regulatory and legal proceedings and other
factors discussed in Item 1 of Westmoreland Coal Company's Form 10-K
for the year ended December 31, 1999. As a result of the foregoing and
other factors, no assurance can be given as to the future results and
achievement of the Company. Neither the Company nor any other person
assumes responsibility for the accuracy and completeness of these
statements.
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For further information contact Diane Jones (719) 442-2600
