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FILED PURSUANT TO RULE 424(b)(3)
REGISTRATION NO. 33-46856
P R O S P E C T U S
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1,022,300 SHARES
ASHLAND COAL, INC.
COMMON STOCK
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All of the shares of the par value $.01 Ashland Coal, Inc. ("Ashland Coal"
or the "Company") Common Stock offered hereby (the "Common Stock") are being
sold by certain shareholders (the "Selling Shareholders") of the Company for
their respective accounts. The Company has agreed to bear certain expenses in
connection with the registration and sale of the Common Stock and has agreed to
indemnify the Selling Shareholders and certain brokers against liabilities,
including those under the Securities Act of 1933, as amended (the "Securities
Act").
All or a portion of the Common Stock may be disposed of by the Selling
Shareholders hereunder from time to time in one or a combination of the
following transactions: (a) in transactions (which may involve block
transactions) on the New York Stock Exchange or other exchanges, or otherwise,
at market prices prevailing at the time of sale or at prices related to such
prevailing market prices; or (b) in privately negotiated transactions at
negotiated prices. The Selling Shareholders may effect such transactions by
selling the Common Stock to or through brokers or dealers and such brokers or
dealers may receive compensation in the form of discounts, concessions or
commissions from the Selling Shareholders or the purchasers of the Common Stock
for whom such brokers or dealers may act as agent, or to whom they sell as
principal, or both (which compensation to a particular broker or dealer might be
in excess of customary commissions or be changed from time to time). The Selling
Shareholders and any brokers, dealers or agents who participate in a sale of the
Common Stock may be deemed "underwriters" within the meaning of Section 2(11) of
the Securities Act of 1933, as amended (the "Securities Act") and the
commissions paid or discounts allowed to any of such brokers, dealers or agents
in addition to any profits received on resale of the Common Stock if any such
brokers, dealers or agents should purchase any Common Stock as a principal may
be deemed to be underwriting discounts or commissions under the Securities Act.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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<TABLE>
<CAPTION>
UNDERWRITING
DISCOUNTS AND PROCEEDS TO SELLING
PRICE TO PUBLIC COMMISSIONS SHAREHOLDERS(1)
<S> <C> <C> <C>
Per Share......................... See Text See Text See Text
Total............................. Above Above Above
<FN>
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(1) The Company has agreed to prepare and file this Prospectus and the related
Registration Statement and supplements and amendments thereto required by
the Securities Act with the Securities and Exchange Commission (the
"Commission"), to register and qualify the Common Stock if required under
applicable Blue Sky laws, and to deliver copies of the Prospectus to the
Selling Shareholders, in each case at Company expense, estimated at $82,600.
The expenses payable by the Selling Shareholders, including selling
commissions and fees and expenses of counsel to the Selling Shareholders,
are not capable of precise estimation by the Company.
</TABLE>
On May 2, 1994, the last reported sale price of the Common Stock on the New
York Stock Exchange composite tape was $27.25 per share. The Common Stock of the
Company is traded on the New York Stock Exchange under the symbol "ACI."
The date of this Prospectus is May 17, 1994.
<PAGE>
AVAILABLE INFORMATION
Ashland Coal has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act (the "Registration Statement") relating to the
securities offered hereby. As permitted by the rules and regulations of the
Commission, this Prospectus omits certain information contained in the
Registration Statement on file with the Commission. For further information
pertaining to the Company and the shares offered hereby, reference is made to
the Registration Statement and exhibits thereto, which may be inspected without
charge at the office of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549. Copies of the Registration Statement, including exhibits, may be
obtained from the Commission at prescribed rates.
The Company's principal executive offices are located at 2205 Fifth Street
Road, Huntington, West Virginia 25701. Its telephone number is (304) 526-3333.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and in accordance
therewith files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, and are available for inspection and copying at the regional offices
in New York (75 Park Place, New York, New York 10007) and Chicago (Northwest
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661).
Copies of such material can be obtained at prescribed rates from the Public
Reference Section of the Commission, 450 Fifth Street, Washington, D.C. 20549.
Such reports, proxy statements and other information can also be inspected at
the offices of the New York Stock Exchange, 20 Broad Street, New York, New York
10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission pursuant to the Exchange
Act are incorporated into this Prospectus by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1993;
(b) The Company's Current Report on Form 8-K filed January 5, 1994;
(c) The Company's Current Report on Form 8-K filed February 17, 1994;
(d) The Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1994;
(e) The Company's Form 8-A dated July 14, 1988, containing a description of
the Company's Common Stock; and
(f) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the annual report
referred to in (a) above.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering shall be deemed to be incorporated by reference
into this Prospectus and to be a part hereof from the date of filing such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
(or in any subsequently filed document which is also incorporated or deemed to
be incorporated by reference herein) modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person to
whom this Prospectus has been delivered, on the written or oral request of any
such person, a copy of any or all of the documents referred to above which may
have been or may be incorporated into this Prospectus by reference, other than
exhibits to such documents (unless such exhibits are specifically incorporated
by reference into such documents). Requests for such copies should be directed
to Ashland Coal, Inc., Attention: Corporate Secretary, 2205 Fifth Street Road,
P.O. Box 6300, Huntington, West Virginia 25771, telephone number (304) 526-3333.
2
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THE COMPANY
Ashland Coal is engaged in the mining, processing, marketing and
distribution of low-sulfur bituminous coal. The Company sells its coal
principally to electric utilities in the eastern United States. The Company also
exports coal, primarily to European customers. Ashland Coal was incorporated in
Delaware in 1975.
For the year ended December 31, 1993, the Company and its independent
operating subsidiaries sold approximately 16 million tons of coal, as compared
to approximately 19.1 and 14.3 million tons sold in 1992 and 1991, respectively.
Approximately 57% of the total number of tons sold during 1993 was sold under
long-term contracts as compared to 66% for 1992 and 67% for 1991. The balance
was sold on the spot market (which includes contracts with a duration of one
year or less). In 1993, the Company sold approximately 2.1 million tons of coal
in the export market, compared to approximately 3.9 million tons in 1992 and 3.8
million tons in 1991. Approximately 61%, 71% and 71% of total revenue for 1993,
1992 and 1991, respectively, were derived from long-term contracts. For the year
ended December 31, 1993, the Company's independent operating subsidiaries
produced approximately 14.2 million tons of coal as compared to approximately
16.7 and 12.2 million tons for 1992 and 1991, respectively. In addition, the
Company purchased for resale 1.6 million tons of coal during 1993 and
approximately 2.0 million tons of coal during each of 1992 and 1991.
Selling prices in many of the Company's long-term contracts are adjusted for
changes in broad price indices and labor costs, including wage rates and other
benefits under the United Mine Workers-Bituminous Coal Operators' Association
National Bituminous Coal Wage Agreement of 1993 ("Wage Agreement"), or any
successor agreement. Some of these contracts also provide for price adjustment
if certain federal and state levies on coal mining and processing are changed.
In addition, most of the Company's long-term contracts provide that the customer
may vary from the base annual quantity, usually by not more than 15%, the
quantity of coal purchased under the contract in a particular year. In addition,
renegotiation of contract terms after execution is not unusual in the industry
to accommodate changing market or operational conditions.
The Company estimates that it had, as of December 31, 1993, approximately
723 million recoverable tons of proven and probable coal reserves in southern
West Virginia and eastern Kentucky, of which approximately 276 million tons are
recoverable using surface mining methods. The Company estimates that a
substantial portion of this coal has a sulfur content of 1% or less, some of
which is compliance coal.(1)
THE SELLING SHAREHOLDERS
Certain information regarding the Selling Shareholders appears in the table
below. The Company has undertaken to prepare and file amendments to the
Registration Statement required to keep the Registration Statement effective as
to shares elected to be offered by the Selling Shareholders hereunder until the
earlier of (i) May 12, 1995, or (ii) the date on which all the Common Stock has
been sold by the Selling Shareholders offering such shares.
<TABLE>
<CAPTION>
SHARES OF COMMON SHARES OWNED AFTER
STOCK OWNED AS OF MAY 1, COMPLETION OF
1994 NUMBER OF THE OFFERING
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SELLING SHAREHOLDER NUMBER % OF CLASS* BEING OFFERED NUMBER % OF CLASS*
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<S> <C> <C> <C> <C> <C>
YMCA Retirement Fund........................... 165,000 1% 30,000 135,000
Capital Research & Management Company, on
behalf of SMALLCAP World Fund, Inc............ 150,000 1% 150,000
Kemper Reinsurance Company..................... 23,300 16,800 6,500
</TABLE>
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(1) Sulfur content of 1% or less refers to percentage by weight. "Compliance
coal" is coal which emits 1.2 pounds or less of sulfur dioxide per million
BTU upon combustion without the aid of sulfur reduction technology.
3
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<TABLE>
<CAPTION>
SHARES OF COMMON SHARES OWNED AFTER
STOCK OWNED AS OF MAY 1, COMPLETION OF
1994 NUMBER OF THE OFFERING
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SELLING SHAREHOLDER NUMBER % OF CLASS* BEING OFFERED NUMBER % OF CLASS*
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<S> <C> <C> <C> <C> <C>
Federal Kemper Life Assurance Company**........ 77,900 74,600 3,300
Lumbermens Mutual Casualty Company............. 300,000 2% 300,000
Fidelity Life Association...................... 15,900 15,900
Kemper Environmental Services Fund............. 48,000 35,000 13,000
The United Company............................. 400,000 3% 400,000
<FN>
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*Percentages are based upon the aggregate number of 13,694,159 shares of Common
Stock outstanding on May 2, 1994. However, if all the Company's outstanding
Class B and C Preferred Stock were to be converted at the current conversion
rate, 18,280,659 shares of Common Stock would be outstanding. Except where
indicated, the percentage of Common Stock owned by a Selling Shareholder is
less than one percent.
**Federal Kemper Life Assurance Company ("FKLA") and one of its affiliates that
is not a Selling Shareholder hold an aggregate of $10 million principal amount
of the Company's 9.78% Senior Notes due September 15, 2000. FKLA is affiliated
with Kemper Reinsurance Company, Lumbermens Mutual Casualty Company, Fidelity
Life Association and Kemper Environmental Services Fund.
</TABLE>
Unless noted above in the table, none of the Selling Shareholders has had
any position, office or other material relationship within the past three years
with the Company or any of its affiliates.
PLAN OF DISTRIBUTION
All or a portion of the Common Stock may be disposed of by the Selling
Shareholders hereunder from time to time in one or a combination of the
following transactions: (a) in transactions (which may involve block
transactions) on the New York Stock Exchange or other exchanges, or otherwise,
at market prices prevailing at the time of sale or at prices related to such
prevailing market prices; or (b) in privately negotiated transactions at
negotiated prices. The Selling Shareholders may effect such transactions by
selling the Common Stock to or through brokers or dealers and such brokers or
dealers may receive compensation in the form of discounts, concessions or
commissions from the Selling Shareholders or the purchasers of the Common Stock
for whom such brokers or dealers may act as agent, or to whom they sell as
principal, or both (which compensation to a particular broker or dealer might be
in excess of customary commissions). Any commissions or discounts paid or
allowed to brokers, dealers or agents may be changed from time to time. The
Selling Shareholders and any brokers, dealers or agents who participate in a
sale of the Common Stock may be deemed "underwriters" within the meaning of
Section 2(11) of the Securities Act and the commissions paid or discounts
allowed to any of such brokers, dealers or agents in addition to any profits
received on resale of the Common Stock if any such brokers, dealers or agents
should purchase any Common Stock as a principal may be deemed to be underwriting
discounts or commissions under the Securities Act.
The Company has agreed to indemnify the Selling Shareholders and certain
brokers executing transactions on their behalf pursuant to the Plan of
Distribution against certain liabilities, including those under the Securities
Act.
LEGAL MATTERS
Hunton & Williams, special counsel to the Company, has passed upon the
validity of the issuance of the shares of Common Stock offered hereby.
EXPERTS
The consolidated financial statements of Ashland Coal appearing in Ashland
Coal's Annual Report (Form 10-K) for the year ended December 31, 1993, have been
audited by Ernst & Young, independent auditors, as set forth in their report
thereon included therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
4
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, THE COMMON STOCK IN ANY JURISDICTION WHERE, OR
TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN
THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Available Information.......................... 2
Incorporation of Certain Documents by
Reference..................................... 2
The Company.................................... 3
The Selling Shareholders....................... 3
Plan of Distribution........................... 4
Legal Matters.................................. 4
Experts........................................ 4
</TABLE>
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1,022,300 SHARES
ASHLAND COAL, INC.
COMMON STOCK
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PROSPECTUS
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MAY 17, 1994
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