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):
September 15, 2000
WESTMORELAND COAL COMPANY
-------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 0-752 23-1128670
-------- ----- ----------
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation or Number Identification No.)
organization)
2 North Cascade Avenue, 14th Floor, Colorado Springs, Colorado 80903
-------------------------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code: 719-442-2600
------------
Item 5. Other Events
The Company announced today that it has agreed to acquire Montana Power
Company's coal business unit for $138 million in cash. The operations produced
approximately 20 million tons of coal in 1999. Closing is expected to occur by
year-end and is subject to various contingencies, including regulatory
approvals.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit 99.4 -- Press release dated September 15, 2000.
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: September 15, 2000 /s/ Robert J. Jaeger
--------------------------
By: Robert J. Jaeger
Senior Vice President-Finance
and Treasurer
<PAGE 1>
---------------------------
Westmoreland To Acquire
Montana Power Coal Business
---------------------------
Colorado Springs, CO - September 15, 2000 -- Westmoreland Coal Company (AMEX:
WLB) and The Montana Power Company (NYSE: MTP) announced today that Westmoreland
has agreed to acquire Montana Power Company's coal business unit for $138
million in cash. The operations produced approximately 20 million tons of coal
in 1999. Closing is expected to occur by year-end and is subject to various
contingencies, including regulatory approvals.
"The Montana Power coal business unit meets the criteria we set forth in the
strategic plan announced to shareholders in April. These are outstanding
businesses which match attractive coal assets with long term sales contracts
that we believe will result in sustainable, long-term profitability and cash
flow at those operations. Western Energy and Northwestern Resources supply coal
to adjacent, low-cost electrical generating units that have the necessary
pollution control technologies in place to meet today's stringent environmental
standards," said Christopher K. Seglem, Westmoreland Coal Company's Chairman,
President and CEO. "We believe these operations give us a solid foundation in
the coal segment of our business and represent the accomplishment of a
significant step in the implementation of the strategic plan we announced last
spring. That plan focuses on the delivery of clean, low-cost electricity through
the production of coal, gas and independent power in attractive niche markets.
Likewise, because they are profitable, the addition of these businesses will
help us capture the value of Westmoreland's advantageous net operating tax loss
carryforwards which we preserved in our restructuring," added Seglem.
Seglem emphasized that Westmoreland also greatly values the skill, dedication
and experience of the current management and employees within these businesses
and looks forward to their joining the Westmoreland family.
Robert P. Gannon, Montana Power's Chairman and Chief Executive commented, "As
with the sale of our oil and gas businesses, Westmoreland was selected after a
robust process, and we are just as delighted by this result. The sale reflects a
strong value for our coal companies, and a promising future for our employees
who will move to Westmoreland, which has a long history in the coal business.
This is a good outcome for us and, we believe, for Westmoreland. Western Energy,
Northwestern Resources, Western SynCoal and their employees should thrive into
the future," he added. "We wish them the very best." Gannon said the proceeds
from the sale of the coal unit, like the oil and gas businesses, would be
invested in growing Touch America, Montana Power's national fiber-optic and
wireless broadband telecommunications subsidiary.
Montana Power offered the coal unit for sale as a package comprised of three
operating companies. The largest operation in the coal unit, Western Energy
Company, owns and operates the Rosebud Mine located in the northern Powder River
Basin near the town of Colstrip, Montana and approximately 25 miles from
Westmoreland's Absaloka Mine. Approximately 90% of the production from the mine
is sold under long-term contracts to the owners of the four, mine-mouth Colstrip
power plant units. In 1999, the Rosebud Mine produced and sold 10.6 million tons
of coal.
The transaction also includes the purchase of Northwestern Resources Co. which
owns and operates the Jewett Mine in Central Texas, and Western SynCoal, which
owns and operates a patented coal-enhancement process at a demonstration plant
located at the Rosebud Mine in Montana. The Jewett Mine represents
Westmoreland's initial entry into the Texas market. Production from the Jewett
Mine is sold under a long-term contract to Reliant Energy, the owner of a
two-unit power production facility adjacent to the mine. In 1999 the Jewett Mine
produced and sold 8.9 million tons of lignite, and Western SynCoal sold 269,000
tons of enhanced coal.
Westmoreland Coal Company, headquartered in Colorado Springs, Colorado, is
implementing a strategic plan for expansion and growth through the acquisition
and development of opportunities in the changing energy marketplace. The Company
was assisted in this transaction by NorWest Mine Services, Inc., the law firm of
Hale & Dorr, and financial advisor, Rothschild Inc. The Company's current core
operations are 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.
The Montana Power Company is a diversified investor-owned electric and natural
gas utility with nonregulated businesses in coal, oil and natural gas, and
independent power production and telecommunications. The company announced March
28, 2000 it would divest all of its energy businesses, including its utility, to
focus on telecommunications under Touch America. Montana Power on August 28
announced that PanCanadian Petroleum Limited is buying its oil and gas
properties. Touch America is a wholly-owned fiber-optic and wireless data
transport telecommunications subsidiary of Montana Power, providing national
long distance, private line, Internet, and business telephone equipment products
and services. The company's digital fiber optic network, which will reach 26,000
route miles nationally by year-end 2001, employs the most advanced
telecommunications technology available today. Touch America and The Montana
Power Company are based in Butte, Montana. The Company was assisted in this
transaction by its financial advisors, Goldman, Sachs & Co. and the law firm of
Milbank, Tweed, Hadley & McCloy, both of New York. Information about Montana
Power can be found at http://www.mtpower.com.
As to Westmoreland Coal Company: 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.
###
Contacts:
Westmoreland Coal Company Montana Power Company
Diane Jones Cort Freeman, Media Relations
(719) 442-2600 (406) 497-2368
Linda McGillen, Investor Relations
(406) 496-5211
