Arch Coal has filed for Chapter 11 bankruptcy protection after months of trying to restructure loans.
The US thermal and coking coal producer filed a petition with the US Bankruptcy Court for the Eastern District of Missouri today as part of a restructuring agreement with lenders holding $1.9bn in first lien financing. A group of lenders holding more than 50pc of the company's first lien debt has agreed to provide $275mn in debtor-in-possession financing.
"After carefully evaluating our options, we determined that implementing these agreements through a court-supervised process represents the best way to solidify our financial position and strengthen our balance sheet," chief executive John Eaves said.
The agreement with lenders will eliminate more than $4.5bn in debt from the company's balance sheet.
Arch has filed a number of motions with the court to continue payments and operations through the reorganization process. The company had more than $600mn in cash and short-term investments available as of today. It also expects securitization financing providers will continue the company's $200mn trade accounts receivable securitization facility.
