Arch Coal Emerges from Chapter 11
October 05 2016 - 01:00PM
Dow Jones News
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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