ST. LOUIS, Mo. — Coal mining giant Arch Coal became the latest U.S. coal producer to file for Chapter 11 bankruptcy protection Monday. The case was filed with the U.S. Bankruptcy Court in the Eastern District of Missouri.
The company said in a media statement it had reached agreement with a majority of the lenders under a $1.9 billion first lien financing to significantly restructure the company’s debt load. The agreement will be subject to the approval of the bankruptcy court.
Arch, which has multiple mining operations in West Virginia, said it had enough operating capital and cash on hand to continue operating during the bankruptcy without interruption. The company stressed it expected no mine closings or layoffs as a result.
“Since the market downturn, we have taken many steps to enhance the efficiency of our operations and to strengthen our asset base,” said John W. Eaves, Arch’s Chairman and CEO. “As a result, all of our operating segments were cash flow positive during the first three quarters of 2015. We will continue to provide our customers with exceptional service as we move through this process, while maintaining and further reinforcing our position as an industry leader in safety, environmental stewardship and productivity.”
The company intends to continue to pay employee wages and provide healthcare and other benefits without interruption in the ordinary course of business and to pay suppliers and vendors in full under normal terms for goods and services provided on or after the Chapter 11 filing date according to the press release. They filed several motions with the court filing and expected to receive a ruling on those soon.
Arch’s troubles are nothing new in the coal business. Patriot Coal, Alpha Natural Resources, and Walter Energy have all filed for Chapter 11.
A downturn in demand in China, increased competition from the glut of historically cheap natural gas, and a negative regulatory environment in Washington D.C. are all blamed as contributors toward the downturn in the industry.