A bankruptcy judge has approved the sale of Cloud Peak Energy Inc. coal mines to a business subsidiary of the Navajo Nation, expanding the tribe’s operations into the busy Powder River Basin coal-mining region, WSJ Pro Bankruptcy reported. Navajo Transitional Energy Co. is acquiring substantially all of Cloud Peak’s assets, including its coal mines, for $15.7 million cash, a $40 million senior loan and other consideration, including the assumption of $93.9 million in non-income tax and production-royalty liabilities. Bankruptcy Judge Kevin Gross said yesterday that he would approve the transaction, pending the finalized paperwork. NTEC, a limited liability company wholly owned by the Navajo Nation, already owns a mine in New Mexico. Acquiring Cloud Peak’s mines out of chapter 11 will make NTEC the third-largest coal producer in the U.S., NTEC chief executive Clark Moseley said in a statement. Cloud Peak filed for chapter 11 protection in May listing assets of more than $926.6 million and $639.4 million in debt. The company’s mines are located in northeastern Wyoming and southeastern Montana in the Powder River Basin, court papers said. Marc Puntus, a Centerview Partners LLC partner advising Cloud Peak, said in a court filing that NTEC was the only potential buyer that didn’t require third-party financing and “offered the lowest relative credit risk.”
