Citibank, Credit Suisse First Boston and UBS are underwriting the financing package backing the purchase of RAG American Coal Holding by First Reserve Corp., The Blackstone Group and American Metals & Coal International (AMCI). Alex Krueger, a director with First Reserve, confirmed the bank roles but declined to comment on why the banks were chosen.
Citi and CSFB are joint bookrunners on the deal. The private equity groups are buying the company from RAG Coal International for around $1 billion. UBS and CSFB acted as M&A advisors to the newly formed acquisition entity. The company does have outstanding debt that is being refinanced with the acquisition, but it is effectively all from German banks, Krueger noted. The deal is expected to close in the third quarter.
RAG Coal International signed a memorandum of understanding for the sale of RAG American Coal in February, which provided for a period of exclusive negotiation with First Reserve, Blackstone and AMCI. Frank Wood, RAG American Coal's cfo, referred calls to First Reserve and Blackstone officials and AMCI officials referred calls to First Reserve officials. A Blackstone spokesman declined comment.