ST.
LOUIS, May 19, 2022 /PRNewswire/ -- Arch
Resources, Inc. (NYSE: ARCH) ("Arch Resources" or "us") today
announced that on May 18, 2022, it
entered into separate, privately negotiated exchange agreements
with a limited number of holders of its 5.25% Convertible Senior
Notes due 2025 (the "notes") to exchange (collectively, the
"exchanges") approximately $125.2
million principal amount of notes for consideration
consisting of an aggregate of approximately $130.1 million in cash and a number of shares of
Arch Resources' common stock to be determined over a four
consecutive trading day period beginning on, and including,
May 19, 2022. The exchanges are
expected to be consummated on or about May
25, 2022, subject to customary closing conditions. The notes
being exchanged will be retired upon completion of the exchanges.
Following the closing of the exchanges, Arch Resources expects that
approximately $30.0 million in
aggregate principal amount of notes will remain outstanding with
terms unchanged.
Arch Resources is undertaking these exchanges in keeping with
its previously stated goal of enhancing and simplifying its capital
structure, and is utilizing a substantial amount of cash in the
settlement process in order to limit overall stock dilution,
prevent potential future dilution stemming from expected future
dividend payments, reduce overall indebtedness, and eliminate
future annual interest payments.
The exchanges are being conducted as private placements, and any
shares of common stock to be issued in the exchanges will be issued
pursuant to the exemption from the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act"), afforded
by Section 4(a)(2) of the Securities Act in transactions not
involving any public offering. This press release is neither an
offer to sell nor a solicitation of an offer to buy any securities
described above, nor will there be any offer, solicitation or sale
of any securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful.
In connection with the exchanges, Arch Resources also intends to
enter into certain capped call early unwind agreements (the "capped
call early unwind agreements") with counterparties to Arch
Resources' capped call transactions (the "capped call
counterparties"), which were entered into in connection with the
issuance of the notes, to terminate a portion of such capped call
transactions in a notional amount corresponding to the amount of
the notes exchanged (the "early unwinds"). We expect that the
capped call counterparties will settle the early unwinds by
delivering to Arch Resources a number of shares of Arch Resources'
common stock corresponding to the consideration in respect of the
early unwinds on or about May 26,
2022. In connection with such settlements, the capped call
counterparties and/or their respective affiliates may buy shares of
the Arch Resources' common stock in secondary market
transactions.
About Arch Resources
Arch Resources is a premier producer of high-quality
metallurgical products for the global steel industry. The company
operates large, modern and highly efficient mines that consistently
set the industry standard for both mine safety and environmental
stewardship.
Forward-Looking Statements: This press release contains
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended—that is, statements
related to future, not past, events. In this context,
forward-looking statements often address our expected future
business and financial performance, and often contain words such as
"should," "could," "appears," "estimates," "expects,"
"anticipates," "intends," "may," "plans," "predicts," "projects,"
"believes," "seeks," or "will." Actual results may vary
significantly from those anticipated due to many factors,
including: impacts of the COVID-19 pandemic; changes in coal
prices, which may be caused by numerous factors beyond our control,
including changes in the domestic and foreign supply of and demand
for coal and the domestic and foreign demand for steel and
electricity; volatile economic and market conditions; operating
risks beyond our control, including risks related to mining
conditions, mining, processing and plant equipment failures or
maintenance problems, weather and natural disasters, the
unavailability of raw materials, equipment or other critical
supplies, mining accidents, and other inherent risks of coal mining
that are beyond our control; loss of availability, reliability and
cost-effectiveness of transportation facilities and fluctuations in
transportation costs; inflationary pressures and availability and
price of mining and other industrial supplies; the effects of
foreign and domestic trade policies, actions or disputes on the
level of trade among the countries and regions in which we operate,
the competitiveness of our exports, or our ability to export;
competition, both within our industry and with producers of
competing energy sources, including the effects from any current or
future legislation or regulations designed to support, promote or
mandate renewable energy sources; alternative steel production
technologies that may reduce demand for our coal; the loss of key
personnel or the failure to attract additional qualified personnel
and the availability of skilled employees and other workforce
factors; our ability to secure new coal supply arrangements or to
renew existing coal supply arrangements; the loss of, or
significant reduction in, purchases by our largest customers;
disruptions in the supply of coal from third parties; risks related
to our international growth; our relationships with, and other
conditions affecting, our customers and our ability to collect
payments from our customers; the availability and cost of surety
bonds, including potential collateral requirements; additional
demands for credit support by third parties and decisions by banks,
surety bond providers, or other counterparties to reduce or
eliminate their exposure to the coal industry; inaccuracies in our
estimates of our coal reserves; defects in title or the loss of a
leasehold interest; losses as a result of certain marketing and
asset optimization strategies; cyber-attacks or other security
breaches that disrupt our operations, or that result in the
unauthorized release of proprietary, confidential or personally
identifiable information; our ability to acquire or develop coal
reserves in an economically feasible manner; our ability to comply
with the restrictions imposed by our term loan debt facility and
other financing arrangements; our ability to service our
outstanding indebtedness and raise funds necessary to repurchase
notes for cash following a fundamental change or to pay any cash
amounts due upon conversion; existing and future legislation and
regulations affecting both our coal mining operations and our
customers' coal usage; governmental policies and taxes, including
those aimed at reducing emissions of elements such as mercury,
sulfur dioxides, nitrogen oxides, particulate matter or greenhouse
gases; increased pressure from political and regulatory
authorities, along with environmental and climate change activist
groups, and lending and investment policies adopted by financial
institutions and insurance companies to address concerns about the
environmental impacts of coal combustion; increased attention to
environmental, social or governance matters; our ability to obtain
and renew various permits necessary for our mining operations;
risks related to regulatory agencies ordering certain of our mines
to be temporarily or permanently closed under certain
circumstances; risks related to extensive environmental regulations
that impose significant costs on our mining operations, and could
result in litigation or material liabilities; the accuracy of our
estimates of reclamation and other mine closure obligations; the
existence of hazardous substances or other environmental
contamination on property owned or used by us; risks related to tax
legislation and our ability to use net operating losses and certain
tax credits; our ability to pay base or variable dividends in
accordance with our announced capital return program, and other
risks as disclosed in our most recent annual report on Form 10-K
and subsequent SEC filings. All forward-looking statements in this
press release, as well as all other written and oral
forward-looking statements attributable to us or persons acting on
our behalf, are expressly qualified in their entirety by the
cautionary statements contained in this section and elsewhere in
this press release. These factors are not necessarily all of the
important factors that could affect us. These risks and
uncertainties, as well as other risks of which we are not aware or
which we currently do not believe to be material, may cause our
actual future results to be materially different than those
expressed in our forward-looking statements. These forward-looking
statements speak only as of the date on which such statements were
made, and we do not undertake to update our forward-looking
statements, whether as a result of new information, future events
or otherwise, except as may be required by the federal securities
laws.
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SOURCE Arch Resources, Inc.