CHARLESTON, W.Va. — A coal operator in southern West Virginia is filing for Chapter 11 bankruptcy protection, but the outcome is expected to make for a stronger company with an improved forward looking forecast.
Blackhawk Mining is restructuring its debt with creditors to keep the company in operation and with more flexibility.
“What we’re doing is converting most of our debt into the equity of the new ownership of the company,” said Blackhawk Chief Financial Officer Jess Parish.
“From an operational standpoint, nothing is changing other than the company is a more secure party and a more secure place to work because there is less of a debt overhang on the business.” he said.
Although the coal industry has been on the upswing in recent years, Parish noted it’s not without obstacles. Blakhawk had a great first quarter, but he added the company’s debt built up over the last few years had become unwieldy.
“The business is fine, the assets are fine, our employees are great. Frankly the first quarter of this year was one of the best quarters in the history of the business, it’s been the debt that’s the overhang,” Parish said.
With a restructuring, Parish anticipated Blackhawk as a new company would emerge stronger and more nimble to move ahead and pay all of its bills He added it could be done without any noticeable changes to vendors or workers. The agreement requires approval of the bankruptcy court.
Blackhawk Mining operates ten coal operations across southern West Virginia and eastern Kentucky with 2,800 employees. The company produces metallurgical coal which is sold both domestically and overseas to steel producers and other industrial customers.