Contura Energy Inc. can now acquire up to $100 million in its own stock after its board of directors approved a plan to purchase shares at set prices over a specified period, the company announced Aug. 29.
Once the plan is established, a designated agent will repurchase shares of common stock on the company's behalf when certain price and other conditions specified in its plan are met. The volume of purchases will increase should the company's stock price decline.
"Based on our confidence in Contura's robust asset portfolio and strong position in both domestic and international markets, our board believes that the company's stock is significantly undervalued at current trading prices," Contura CEO David Stetson said. "We have heard our shareholders loud and clear, and are executing this stock buyback as a first step in the previously announced strategic capital allocation program focused on enhancing shareholder value."
The plan's design allows it to repurchase common stock at times it might otherwise be prevented from doing so under insider trading laws. Company executives recently noted on an earnings call that they believed a decline in the company's share price was overestimating their potential exposure to liabilities related to assets it sold to Blackjewel LLC. Contura sold two large Powder River Basin coal mines to Blackjewel before its bankruptcy and is currently negotiating with government officials in an attempt to complete the repurchase of the mines.
Several coal companies, including Peabody Energy Corp. and Arch Coal Inc. have focused capital toward share repurchase programs in the past several quarters.
