Toronto Stock Exchange: XRG
(All Amounts in $US unless otherwise stated)
KNOXVILLE, TN, June 10, 2011 /PRNewswire/ - Xinergy Ltd., (TSX: XRG) ("Xinergy" or the "Company"), a US Central Appalachian producer of high quality coal, today announced its wholly owned subsidiary Xinergy Corp. has divested its interest in Elk Horn Coal Company, LLC ("Elk Horn") in connection with the acquisition of Elk Horn by Rhino Resource Partners, LP (the "Rhino Acquisition"). Pursuant to the terms of the definitive documentation governing the Rhino Acquisition (the "Merger Documents"), the Company expects to receive initial gross proceeds of approximately $17.9 million, or approximately $9.67 per unit, in respect of its 1,852,367 Elk Horn membership units which had represented roughly a 17.5% stake in Elk Horn. Xinergy purchased this position in November, 2010 for $7,750,000 or approximately $4.18 per unit, and has since received $836,449 or approximately .45 per unit in aggregate cash distributions. In addition, certain amounts have been set aside in escrow pursuant to the Merger Documents to cover indemnification claims and related fees and expenses which, if not exhausted, could result in additional gross proceeds in favor of Xinergy in an amount up to approximately $1.07 million (approximately .58 per Elk Horn membership unit).
Jon Nix, Xinergy's Chairman and CEO, commented, "We are pleased with the outcome of the Elk Horn transaction, which delivered superior risk-adjusted returns to our shareholders. Consistent with our broader acquisition strategy, we maintained flexibility during the course of this investment in a manner which positioned us to be either a buyer or a seller of an asset we viewed as strategic to our core operations. As we continue to execute our growth plan, we believe that the outcome of this transaction reflects the considerable restraint and discipline we strive to exercise on a consistent basis towards ensuring that all investments achieve return hurdles commensurate with the specific risks involved."
About Xinergy Ltd.
Headquartered in Knoxville, Tennessee, Xinergy Ltd., through its wholly owned subsidiary Xinergy Corp. and its subsidiaries, is engaged in coal mining in eastern Kentucky and West Virginia. Currently, Xinergy sells high quality coal to electric utilities and industrial companies throughout the south-eastern United States. For more information, please visit www.xinergycorp.com.
Forward-Looking Information
This release contains "forward-looking information" that includes information relating to future events and future financial and operating performance, including management's assessment of Xinergy's future outlook. Forward-looking information should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by which, that performance or those results will be achieved. Forward-looking information is based on information available at the time it is made and/or management's good faith belief as of that time with respect to future events, and such information is subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking information. Important factors that could cause these differences include but are not limited to: changes in contracted sales, the business of the Company may suffer as a result of uncertainty surrounding the coal market; the Company may be adversely affected by other economic, business, and/or competitive factors; the worldwide demand for coal; the price of coal; the price of alternative fuel sources; the supply of coal and other competitive factors; the costs to mine and transport coal; the ability to obtain new mining permits; the costs of reclamation of previously mined properties; the risks of expanding coal production; the ability to bring new mines on line on schedule; industry competition; the Company's ability to continue to execute its growth strategies; and general economic conditions. These and other risks are more fully described in the Company's filings with the Canadian Securities Administrators, including its Annual Information Form for the year ended December 31, 2010, available on SEDAR at www.sedar.com. You should not put undue reliance on any forward-looking information. We assume no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking information, no inference should be drawn that we will make additional updates with respect to those or other forward-looking information.
SOURCE Xinergy Ltd.
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