UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): March 12, 2009 (March 6, 2009)
Arch Coal, Inc.
(Exact name of registrant as specified in its charter)
| |
|
|
|
|
| Delaware
|
|
1-13105
|
|
43-0921172 |
(State or other jurisdiction of
incorporation)
|
|
(Commission File Number)
|
|
(I.R.S. Employer Identification No.) |
CityPlace One
One CityPlace Drive, Suite 300
St. Louis, Missouri 63141
(Address, including zip code, of principal executive offices)
Registrant’s telephone number, including area code: (314) 994-2700
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions:
| o |
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| |
| o |
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| |
| o |
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
| |
| o |
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
TABLE OF CONTENTS
Item 1.01 Entry Into a Material Definitive Agreement.
Amendment to Credit Agreement
On March 6, 2009, Arch Coal, Inc., a Delaware corporation (the “Company”), entered into an
amendment (the “Credit Amendment”) to its credit agreement, dated December 22, 2004 (as amended,
the “Credit Agreement”) with the banks named in the Credit Agreement and PNC Bank, National
Association, as administrative agent for the banks party thereto.
The purpose of the Credit Amendment was to correct certain technical deficiencies contained in
the negative covenants and other provisions prohibiting the Company and certain subsidiaries from
entering into agreements restricting their ability to incur liens, to make certain payments or to
issue guarantees. The Credit Amendment also increases the maximum leverage ratio, as determined in
accordance therewith. In connection with these changes, the Credit Amendment also increases the
interest rates on borrowings under the credit facility contained in the current pricing grid.
As of March 6, 2009, the Company had approximately $375.0 million of borrowings outstanding
under the Credit Agreement.
Some of the banks under the Credit Agreement and/or their affiliates have or may have had
various relationships with the Company and its subsidiaries involving the provision of a variety of
financial services, including investment banking, underwriting and commercial banking services,
including issuances of letters of credit, for which the financial institutions and/or affiliates
receive customary fees, and, in some cases, out-of-pocket expenses.
The Company described the material terms of the Credit Agreement in Item 1.01 of its Current
Report on Form 8-K filed on December 28, 2004 and in Item 1.01 of its Current Report on Form 8-K
filed on June 27, 2006, and incorporates those descriptions herein by this reference, appropriately
modified as set forth above.
A copy of the Credit Amendment is filed as Exhibit 10.1 to this Form 8-K and is incorporated
in this Item 1.01 by reference. The description of the Credit Amendment set forth in this Item
1.01 is not complete and is qualified in its entirety by reference to the full text of the Credit
Amendment set forth on Exhibit 10.1, and readers are encouraged to review the Credit Amendment in
its entirety.
Jacobs Ranch Acquisition
On March 8, 2009, the Company entered into a Membership Interest Purchase Agreement (the
“Purchase Agreement”) with Rio Tinto Sage LLC, a Delaware limited liability company (“Seller”),
pursuant to which the Company has agreed to purchase from Seller all of the issued and outstanding
membership interests of Jacobs Ranch Coal LLC, a Delaware limited liability company (“Jacobs Ranch”).
Following consummation of the acquisition, Jacobs Ranch will be wholly-owned by the Company.
Under the terms of the Purchase Agreement, the aggregate cash consideration to be paid by the
Company to Seller at the closing of the transaction is $761.0 million, subject to certain cash,
working capital, indebtedness and other adjustments set forth in the Purchase Agreement.
The Purchase Agreement contains customary representations and warranties, covenants and other
terms and conditions, including conditions relating to approvals under competition laws and
regulations, and the closing is expected to occur as soon as possible following receipt of such
approvals in the relevant jurisdictions. The Purchase Agreement may be terminated at any time
prior to the closing, as follows: (a) by mutual written consent of the Company and Seller; (b) by
either party if certain required approvals are not obtained within 90 days after the initial
filing with the Federal Trade Commission (the “FTC”); (c) by Seller to the Company if closing has
not occurred within 180 days after the initial filing with the FTC; (d) automatically if closing
has not occurred within 365 days after the initial filing with the FTC; (e) by either party if the
other party fails or refuses to consummate the transaction in accordance with the terms of the
Purchase Agreement or (f) by Seller if the value of certain encumbrances exceed $10.0 million
unless a corresponding adjustment to the purchase price is made.
In the Purchase Agreement, the parties have agreed to various instances in which a termination
fee may be payable by the Company to Seller, including the following: (a) $2.0 million if certain
required approvals
1
are not obtained within 90 days after the initial filing
with the FTC; (b) $30.0 million if closing has not occurred within 365 days after the initial
filing with the FTC or if the Company fails or refuses to consummate the transaction in accordance
with the terms of the Purchase Agreement or (c) $50.0 million if the closing has not occurred
within 365 days after the initial filing with the FTC solely as a result of the Company’s inability
to pay the purchase price.
There can be no assurance that the transactions contemplated by the Purchase Agreement will be
consummated.
A copy of the Purchase Agreement is filed as Exhibit 2.1 to this Form 8-K and is incorporated
in this Item 1.01 by reference. The description of the Purchase Agreement set forth in this Item
1.01 is not complete and is qualified in its entirety by reference to the full text of the Purchase
Agreement set forth on Exhibit 2.1, and readers are encouraged to review the Purchase Agreement in
its entirety.
|
|
|
| Item 2.03 |
|
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant. |
Information concerning the amounts for which the Company has become obligated under the Credit
Agreement, as amended by the Credit Amendment, set forth above under Item 1.01 is hereby
incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
The following exhibit is attached hereto and filed herewith.
| |
|
|
|
|
| Exhibit |
|
|
| No. |
|
Description |
| |
| |
2.1* |
|
|
Membership Interest Purchase Agreement, dated as of March 8, 2009,
by and between Rio Tinto Sage LLC and
Arch Coal, Inc. |
| |
|
|
|
|
| |
10.1 |
|
|
Third Amendment to Credit Agreement, dated as of March 6, 2009, by
and among Arch Coal, Inc., the banks party thereto, Citicorp USA,
Inc., JPMorgan Chase Bank, N.A. and Wachovia Bank, National
Association, each in its capacity as syndication agent, Bank of
America, N.A. (as successor-by-merger to Fleet National Bank), as
documentation agent, and PNC Bank, National Association, as
administrative agent for the banks. |
|
|
|
| * |
|
Certain appendices, exhibits and/or similar attachments to this agreement have been
omitted pursuant to Item 601(b)(2) of Regulation
S-K. The registrant will furnish
supplementally a copy of any omitted appendix, exhibit or similar attachment to the SEC
upon request. |
2