Czech Energy Operator Lands Share in Corsa Coal
May 19, 2020 - Coal mine and power plant operator in the Czech Republic, Sev.en Energy has on-boarded a 17.1% share in United States coal production company Corsa Coal Corp, with help from Dentons’ lawyers.
With mines in both Pennsylvania and Maryland, Corsa Coal focuses production and sales on metallurgical coal, which is used in the production of steel. The production of steel has seen a sharp decline since the onset of Covid-19, as Mainland China produces more than half of the world’s supply.
Moreover, according to research and analysis company IHS Markit, Hubei, which is where the Coronavirus pandemic originated from, uses a substantial amount of steel in manufacturing and automotive activities. With the region in lockdown throughout March and April, steel supply suffered.
Sev.en Energy owns coal and energy production sites across the Czech Republic, the United Kingdom and Australia. By acquiring a minority interest Toronto Stock Exchange-listed Corsa Coal Corp, it sets foot into the metallurgical mining sector, as well adding the US to its portfolio.
For Pennsylvania-headquartered Corsa Coal, its first quarter financial results released on May 6 showed net and comprehensive losses totalling USD 5.8 million, as well as reduced revenues and a drop in metallurgical coal sales, which may explain the sale of a stake to Corsa.
In the financial announcement, CEO of Corsa, Peter Merritts said in a statement: “Metallurgical coal spot market prices and demand declined during the first quarter, and continued to decline into the second quarter, in response to the Covid-19 pandemic which created uncertainty in the global markets.”
He added: “Despite the impact and operational disruptions caused by Covid-19, our mines and plants continued to produce at a high level.”
Referring to a general outlook on coal industry trends, the company said that “the global business impact of Covid-19 on both metallurgical coal supply and demand” is uncertain, adding that “metallurgical coal supply, demand and pricing outlook commentary will be resumed when deemed appropriate by the company”.
The Dentons advisory team was based across Prague, New York, Toronto, Lexington, Louisville and Washington, DC.
Meanwhile, a China oil storage terminal sale has signified heightened investor confidence in Asia.