October 9, 2018 Read More →

Westmoreland Coal files for bankruptcy

S&P Global Market Intelligence ($):

Westmoreland Coal Co. filed for Chapter 11 bankruptcy protection on Oct. 9 after years of attempting to deliver its balance sheet.

Westmoreland entered into a restructuring support agreement with an ad hoc group of lenders that hold about 76.1% of the company’s term loan, 57.9% of its senior secured notes and 79.1% of its bridge loan, according to a company release. The company’s U.S. and Canadian operations are “cash flow positive.” Given its operations’ liquidity and its Debtor-In-Possession financing, Westmoreland anticipates continuing to operate its mines as normal without affecting output levels or reducing staff.

Under its restructuring support agreement, “Westmoreland launched a business transformation aimed at significantly increasing cash flow for all operational and support areas of the business,” according to the release.

The coal producer, which has focused on a mine-to-mouth strategy some thought immune to the problems affecting the rest of the coal industry, had been working to downplay the possibilities of a bankruptcy since its former CEO Kevin Paprzycki stepped down in November 2017.

On April 2, Westmoreland notified investors that it may seek Chapter 11 bankruptcy protection or be subject to involuntary petition for bankruptcy and that its auditors have expressed “substantial doubt” about the company’s ability to continue as a going concern.

The Nasdaq Stock Exchange halted trading of the company’s shares in late April after its share price and market value fell below listing thresholds for more than 30 days.

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