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 Post subject: Mahanoy City coal company gets economic boost
PostPosted: Thu Aug 27, 2009 7:49 am 
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Location: From Schuylkill County, PA living in Phoenix, AZ
Mahanoy City coal company gets economic boost

By Peter E. Bortner
Pottsville Republican & Herald
August 27, 2009

A longtime family-owned mining company based in Mahanoy City has received an economic boost from a Delaware County equity firm, which also promises to continue to invest in the business that helped Schuylkill County grow.

Blaschak Coal Corp., founded in 1937, has been recapitalized by Milestone Partners, Saint Davids, according to Daniel F. Ryan, director of business development for Milestone.

While not revealing how much money was involved, Dan Blaschak, vice president of the coal company, said in a written statement that it should enable his company to grow and thrive.

"They helped our family achieve financial goals for which we have worked long and hard, and we believe they will also help us to grow the company to new heights for years to come," he said.

However, neither Dan Blaschak nor Anthony Blaschak, the coal company's president, responded Wednesday to e-mails or telephone calls seeking comment on, or the reasons for, the deal.

Recapitalization, which involves restructuring a company's debt and equity mixture, allows a company to exchange one form of financing for another, such as removing preferred shares from the company's capital structure and replacing them with bonds.

According to the Options Industry Council, recapitalization often is done by companies trying to make their capital structure more stable or to boost their stock price.

However, John J. Nowaczyk, vice president of Milestone Partners, said the recapitalization makes sense for both his company and Blaschak.

"We think one of our specialties is the classic family business," Nowaczyk said. "That is just what we have here in Blaschak ... a second-generation family business with no active third-generation family members."

He said Milestone will put its money where its mouth is to try to boost Blaschak's business.

"Milestone is committed to supporting the growth of Blaschak with capital for strategic add-on acquisitions , as well as mien development and expansion projects," Nowaczyk said.

Nowaczyk said the deal allows the Blaschak family cash to remain active in the business and provides it with actual cash to use in it.

He also thinks Pennsylvania's anthracite industry in general, and Blaschak in particular, is worth the investment.

"Anthracite is now resurgent as a nearly smokeless home heating fuel," as well as being used in water filtration and steel and sugar production, Nowaczyk said. "Many of those anthracite stoves are displacing foreign oil and creating good-paying Pennsylvania jobs."

As for Blaschak, Nowaczyk believes it can remain a major force in anthracite production because of a clean, high-quality product.

"Blaschak is among the largest anthracite companies," and has the ability to mine, process, bag, load and market the product, he said. It also has several mines and a diverse base of customers, according to Nowaczyk.

"Blaschak has developed a strong sales and marketing team and the company is constantly looking to broaden and deepen its customer base and the end market applications for anthracite," he said.

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