White Energy’s subsidiary has agreed to sell key Kentucky coal assets for USD 3.8 million, marking a significant step in recovering outstanding debts from a bankrupt former subsidiary.
- Sale of Mountainside Coal Company assets for USD 3.8 million
- Assets include coal wash plant, permit, and land lease in Kentucky
- Proceeds shared with joint venture partner Proterra Investments Partners
- Sale subject to permit transfer and lease assignment conditions
- Funds earmarked for mineral exploration and corporate purposes
Background on the Asset Sale
White Energy Company Limited’s wholly owned subsidiary, Binderless Coal Briquetting Company Pty Limited (BCBC), has entered into an agreement to sell certain assets reacquired from the bankruptcy liquidation of Mountainside Coal Company Inc. (MCC). The assets, located in Kentucky, include a coal wash plant, a coal permit, and land lease rights. The buyer, Blue Gem Poplar Creek LLC, a newly incorporated Kentucky-based company, has agreed to pay USD 3.8 million (approximately AUD 5.4 million) in cash for these assets.
This transaction follows MCC’s Chapter 7 bankruptcy process, which was converted from Chapter 11 after MCC failed to present a viable restructuring plan. The auction of MCC’s principal assets was confirmed by the court and closed in August 2025, with BCBC acquiring the assets from joint venture partner Proterra Investments Partners.
Terms and Conditions of the Sale
The sale is expected to close by 16 February 2026, contingent on several key conditions. These include the buyer’s wire transfer of the cash consideration, lodging a USD 0.5 million bond with the Kentucky government for the coal permit, and executing lease and permit operating agreements. The buyer must also submit a permit transfer application within 14 days of closing, assuming operational responsibility for the permit.
Importantly, the agreement contains safeguards for BCBC – if the permit transfer is denied or if there is a continuing lease default, the sale can be reversed, with BCBC retaining liquidated damages of USD 600,000 or USD 1.2 million respectively. This protects White Energy from potential regulatory or contractual setbacks.
Financial and Strategic Implications
The proceeds from this sale represent a significant partial recovery of the USD 2.5 million debt owed from the original sale of MCC in 2021. White Energy and Proterra held security over MCC’s assets, and this transaction helps recoup funds following MCC’s bankruptcy. The funds are intended primarily to support White Energy’s ongoing mineral exploration activities, cover Proterra’s share of the sale proceeds after costs, and fund general corporate purposes.
While preliminary due diligence on the buyer has been conducted, including checks on corporate standing and financing assurances, White Energy has not independently verified the buyer’s financing. This introduces some uncertainty around the transaction’s completion, underscoring the importance of the closing conditions.
Looking Ahead
This asset sale marks a pivotal moment for White Energy as it seeks to stabilise its financial position and refocus on its core exploration and technology-driven initiatives. The outcome of the sale and the buyer’s ability to meet conditions will be closely watched by investors, given the potential impact on White Energy’s liquidity and strategic direction.
Bottom Line?
White Energy’s recovery efforts hinge on the buyer’s financing and regulatory approvals, setting the stage for a critical next phase.
Questions in the middle?
- Will Blue Gem Poplar Creek LLC secure and maintain the necessary financing to complete the purchase?
- How will the permit transfer process unfold with Kentucky regulators, and what risks remain?
- What impact will the sale proceeds have on White Energy’s exploration programs and overall financial health?