Arch Coal Inc. emerged from bankruptcy Wednesday after winning court approval on a turnaround plan that clears nearly $5 billion in debt from the coal producer's books.

Chief Executive John W. Eaves said Wednesday that the restructuring has repositioned Arch to succeed in a recovering energy market.

"We are particularly pleased to be emerging in a resurgent metallurgical market, and look forward to similar strengthening in thermal coal markets in the months ahead," Mr. Eaves said.

The reorganized company resumed trading Wednesday on the New York Stock Exchange under the ticker ARCH.

Shares of Arch Coal were at $63.75 in midday trading Wednesday.

Equity in the old Arch was wiped out under the company's chapter 11 plan.

Arch exits chapter 11 protection with more than $300 million of cash on its balance sheet and a debt level that is 7% of what it was before the reorganization.

Arch filed for chapter 11 protection in January after a failed effort to restructure its debts outside of bankruptcy court. At the time, over a quarter of U.S. coal production was in bankruptcy, trying to reorganize to cope with prices that had fallen 50% since 2011, battered by competition from natural gas and new environmental rules.

The U.S. Bankruptcy Court in St. Louis confirmed Arch's chapter 11 plan of reorganization in September.

The plan, a product of settlement talks with junior creditors, reduces Arch's debt load by about $4.7 billion and ensures that the company will be a "lean, mean, fighting machine for the coming era, which will remain challenging and complicated for the U.S. coal industry," Arch bankruptcy lawyer Marshall Huebner said in court last month.

Unsecured creditors including bondholders are slated to receive $30 million in cash and 6% of the new shares, according to court papers. Bondholders also get to choose between warrants to buy up to 12% of Arch's new common shares or $25 million in additional cash. All of the stock distributions are subject to dilution by the warrants and a management incentive program.

Arch's exit follows SandRidge Energy Inc.'s announcement Tuesday that it has emerged from chapter 11 protection. The oil and gas driller received approval to relist on the New York Stock Exchange under the ticker symbol "SD."

SandRidge's restructuring plan slashed $3.7 billion from its books and put the company in the hands of a group of bondholders.

Jacqueline Palank contributed to this article.

Write to Sarah Chaney at sarah.chaney@wsj.com

 

(END) Dow Jones Newswires

October 05, 2016 12:45 ET (16:45 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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