Westmoreland Announces Consent Solicitation for Its 10.75% Senior Secured Notes Due 2018

ENGLEWOOD, Colo.--()--Westmoreland Coal Company (NasdaqGM: WLB) announced today that it is soliciting consents from holders of its outstanding 10.75% Senior Secured Notes due 2018 (the “Notes”) to approve proposed amendments to the indenture relating to the Notes (the “Indenture”) and to the related security and intercreditor agreements.

Westmoreland is conducting this consent solicitation to obtain the consent of holders of the Notes to certain amendments to the Indenture that would (i) permit an increase in borrowing availability under Westmoreland’s revolving credit agreement and permit borrowings thereunder by Westmoreland and its Restricted Subsidiaries (as defined in the Indenture) and (2) eliminate provisions relating to the separate credit agreement of Westmoreland Mining, LLC (“WML”) which Westmoreland intends to terminate. The proposed amendments also include amendments to the security agreement and intercreditor agreement applicable to the Notes, to make changes to account for the revision of the Indenture and the Westmoreland revolving credit agreement and the WML Refinancing (as defined below). Approval of the proposed amendments requires the receipt of consents from holders of a majority in principal amount of outstanding Notes (the “Requisite Consents”).

The consent solicitation is being conducted in connection with the proposed acquisition by Westmoreland of two subsidiaries of Sherritt International Corporation (together with certain related transactions, the “Sherritt Acquisition”). In connection with the Sherritt Acquisition, Westmoreland intends to (1) increase the borrowing availability under its existing revolving credit facility, (2) terminate the existing WML credit agreement, and (3) use a portion of the proceeds of a new debt offering to prepay WML’s 8.02% Senior Guaranteed Secured Notes due March 31, 2018. The anticipated termination of the WML credit agreement and the prepayment of the WML notes are referred to collectively as the “WML Refinancing”. Neither the Sherritt Acquisition nor the WML Refinancing are conditioned upon the receipt of the Requisite Consents. The proposed amendments becoming operative will be conditioned on the completion of the Sherritt Acquisition and the making of the Consent Payment referred to below, which conditions cannot be waived by the Company.

In connection with the consent solicitation, Westmoreland will make a cash payment (the “Consent Payment”) of $1.25 per $1,000 in principal amount of Notes as to which a duly executed consent is delivered by a holder, and not revoked, on or prior to the expiration date for the consent solicitation, namely 5:00 p.m., New York City time, on February 3, 2014 (as the same may be extended by Westmoreland, the “Expiration Date”). Westmoreland’s obligation to make any Consent Payment is contingent upon completion of the Sherritt Acquisition, receipt of the Requisite Consents and other conditions described in the consent solicitation statement relating to the consent solicitation.

Consents that have been validly delivered may be validly revoked at any time prior to the Expiration Date. If the Requisite Consents to the proposed amendments are received and the supplemental indenture relating to the proposed amendments becomes effective and operative, the proposed amendments will be binding on all holders of the Notes, including holders that do not deliver consents.

Holders of Notes wishing to deliver consents will be required to temporarily deposit the related Notes with Global Bondholder Services Corporation, the Information and Tabulation Agent for the consent solicitation, in a contra-CUSIP number established by The Depository Trust Company until the Expiration Date. Trading of deposited Notes will not be permitted. The Notes as to which such consents are delivered will be held by the Information and Tabulation Agent and transfer will be blocked until they are returned to the holder promptly after the Expiration Date, unless such holder revokes such consents before the Expiration Date or the consent solicitation is terminated by Westmoreland.

For a complete statement of the terms and conditions of the consent solicitation and the proposed amendments, holders of the Notes should refer to the consent solicitation statement dated January 24, 2014 and the related consent form.

BMO Capital Markets Corp. and Deutsche Bank Securities Inc. are serving as the Solicitation Agents in connection with the consent solicitation. Questions concerning the terms of the consent solicitation should be directed to the Solicitation Agents by calling BMO Capital Markets Corp. at (800) 221-9443 (toll-free) or (212) 702-1191 (direct) or Deutsche Bank Securities Inc. at (855) 287-1922 (toll-free) or (212) 250-7527 (collect).

Global Bondholder Services Corporation is serving as the Information and Tabulation Agent in connection with the consent solicitation. Requests for assistance in completing and delivering a consent form or requests for additional copies of the consent solicitation statement and the related consent form should be directed to the Information and Tabulation Agent, by calling (866) 924-2200 (toll-free) or (212) 430-3774 (collect).

The consent solicitation is not being made to holders in any jurisdiction in which the making of the consent solicitation or the acceptance thereof would not be in compliance with the laws of such jurisdiction. However, Westmoreland may in its discretion take such action as it may deem necessary to make the consent solicitation in any such jurisdiction and extend the consent solicitation to holders in such jurisdiction. In any jurisdiction in which the securities laws or blue sky laws require the consent solicitation to be made by a licensed broker or dealer, the consent solicitation will be deemed to be made on behalf of Westmoreland by the Solicitation Agents, or one or more registered brokers or dealers that are licensed under the laws of such jurisdiction.

Cautionary Note Regarding Forward-Looking Statements

Some of the information contained in this press release constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although Westmoreland’s management believes its expectations are based on reasonable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that actual results will not differ materially from expectations. Factors that could cause actual results to differ materially from expectations include, but are not limited to the risk factors in Westmoreland’s reports filed with the Securities and Exchange Commission.

About Westmoreland Coal Company

Westmoreland Coal Company is the oldest independent coal company in the United States. The Company’s coal operations include sub-bituminous coal mining in the Powder River Basin in Montana and Wyoming, and lignite mining operations in Montana, North Dakota and Texas. Its power operations include ownership of the two-unit ROVA coal-fired power plant in North Carolina. For more information, visit www.westmoreland.com.


Westmoreland Coal Company
Kevin Paprzycki, 855-922-6463


Westmoreland Coal Company
Kevin Paprzycki, 855-922-6463