Coal producer Warrior Met Coal LLC is working with bankers on a U.S. initial public offering for next year that could value the company at as much as $3 billion, according to people familiar with the matter.
The Apollo Global Management LLC-backed company is working with banks including Credit Suisse Group AG on the stock sale, which could happen as soon as the first half of 2017, said the people, asking not to be identified because the matter isn’t public. While volatility in coal prices has made it difficult to put a price on the company, it could be valued from $1 billion to $3 billion in an IPO, the people said.
Warrior joins Lexington, Kentucky-based Ramaco LLC in preparing to sell shares, said the people, amid a rapid rise in coal prices over the past year.
Spokesmen for Credit Suisse and Brookwood, Alabama-based Warrior declined to comment. Representatives for Apollo and Ramaco didn’t immediately respond to requests for comment.
Metallurgical coal prices have soared about 300 percent this year to around $300 a metric ton, reversing five years of pain for miners of the steelmaking component. The rebound has been driven by increased imports in China, which has curtailed domestic production, as well as some supply issues in Australia.
The rally has breathed new life into the U.S. coal sector, helping fuel Arch Coal Inc.’s return from bankruptcy and spurring Peabody Energy Corp. to try paying off a loan early as it reorganizes.
Warrior is a leading producer and exporter of metallurgical coal for the global steel industry with mines across Alabama, according to its website. The company consists of the former core assets of Walter Energy Inc., which filed for bankruptcy in July 2015, with an operating capacity to mine about 8 million tons of coal a year from 300 million tons of recoverable reserves.
--With assistance from Tim Loh To contact the reporters on this story: Scott Deveau in Toronto at sdeveau2@bloomberg.net, Kiel Porter in New York at kporter17@bloomberg.net, Dinesh Nair in London at dnair5@bloomberg.net. To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, Lynn Doan
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