Source: AL.com
Date: November 23, 2021
Author: William Thornton
“Three U.S. senators are asking for answers from two private equity firms that they say helped create the conditions that led to the ongoing Warrior Met Coal strike in Alabama.
Sens. Elizabeth Warren, (D-Mass.), Bernie Sanders (I-Vt), and Tammy Baldwin (D-Wisc.) sent a letter to two firms, Apollo Global Management and Blackstone, which previously owned Warrior Met Coal. In six-page letters to the firms, the senators also ask for details regarding the time their companies were invested in the coal company.
At issue are decisions they say that kept the company alive yet stripped miners of pay and benefits while eventually paying more than $1 billion in dividends to shareholders.
“While workers endured severe cuts to pay and benefits after the Warrior Met takeover, Apollo and the rest of the private equity consortium appear to have made off like bandits,” one of the letters reads.
Members of the United Mine Workers of America began a strike against Warrior Met Coal on April 1, citing concessions they say were made as Warrior Met emerged from the bankruptcy proceedings of the former Walter Energy, which declared bankruptcy in 2016. Union members contend they made numerous concessions in pay, benefits, holidays, overtime and in other areas to keep the company going and get it out of bankruptcy.
Union members have twice picketed the New York offices of BlackRock, an investment management corporation that is the world’s largest asset manager, not to be confused with Blackstone.
The senators said they have been concerned that “some private equity firms pursue strategies that extract value from portfolio companies at the expense of workers and communities.”
According to the lawmakers, Warrior Met returned at least $1.4 billion in dividends since the company went public in 2017, including nearly $800 million special cash distributions in 2017 alone, funded in part through debt. Within two years, Apollo, Blackstone, and the other private equity firms that had owned Warrior Met sold their shares, the senators said.
“These strategies include loading debt onto companies to fund payouts for the private equity firm and its executives, engaging in severe cost-cutting measures that harm workers and consumers, and quickly cashing out after extracting as much value as they can,” the letter states.”
