Alpha Natural Resources announced today that it has emerged from Chapter 11 bankruptcy court protection, with newly formed Contura Energy acquiring the majority of its core assets.
Contura, set up by a group of Alpha's first lien lenders, has purchased all of Alpha's assets in the Powder River basin and Northern Appalachia, as well as three Central Appalachian complexes and the company's interest in the Dominion Terminal Associates coal export facility in Newport News, Virginia.
The reorganized Alpha is a smaller, privately held company focused primarily on environmental reclamation and the operation of 18 mines and eight preparation plants in West Virginia and Kentucky — a fraction of the original company's assets. The company said it will have 3,000 employees. David Stetson has been appointed chief executive.
Alpha "emerges as a company with a solid financial foundation and a strong team to continue to mine and sell coal," Stetson said. Despite the difficulties facing the coal market, Stetson said Alpha "will have the structure, resources, and talent to successfully weather these challenges."
Kevin Crutchfield has been appointed as Contura's chief executive, heading a workforce of 2,200 former Alpha employees.
"Today marks the successful culmination of a complex and arduous process," Crutchfield said. "The result is the creation of a strong operational asset base, well-positioned to serve unique customer needs in today's challenged coal market."
The reorganization plan, approved by the courts on 7 July, also calls for Contura to provide $35mn in credit support for Alpha's reorganization to help the company through September 2018, along with another $100mn in restricted cash accounts over 10 years to help fund ongoing reclamation activity.
According to the reclamation agreements, Alpha will pay $4.12mn to the US Interior Department's Bureau of Land Management and Office of Natural Resources Revenue to cover liabilities in Wyoming, plus interest.
Contura will also replace self-bonds for the assets it purchased in West Virginia and Wyoming, at an amount to be determined by state regulators. Previously Alpha's self-bonded obligations in each state were estimated to total $244mn and $411mn, respectively.
Alpha will have offices in West Virginia and Tennessee, and Contura will be based in Tennessee.
