Arch Coal files for bankruptcy in US court

10 January 2016 (Last Updated January 10th, 2016 18:30)

Arch Coal and all of its wholly owned domestic subsidiaries have filed voluntary petitions for reorganisation in the US Bankruptcy Court for the Eastern District of Missouri.

Arch Coal and all of its wholly owned domestic subsidiaries have filed voluntary petitions for reorganisation in the US Bankruptcy Court for the Eastern District of Missouri.

The company also reached an agreement with a majority of its lenders under its $1.9bn first lien financing facility in order to restructure its debt.

The reorganisation will not impact on the company's mining operations and shipments to customers, will remove $4.5bn in debt from the company's balance sheet.

"Since the market downturn, we have taken many steps to enhance the efficiency of our operations and to strengthen our asset base."

Arch Coal said that the reorganisation will be subject to approval by the Bankruptcy Court.

Arch Coal chairman and CEO John Eaves said: "Since the market downturn, we have taken many steps to enhance the efficiency of our operations and to strengthen our asset base.

"As a result, all of our operating segments were cash-flow positive during the first three quarters of 2015."

The company believes that it has enough liquidity to proceed with its normal mining activities.

As of 11 January 2016, Arch had more than $600m in cash and short-term investments. It hopes to obtain a further $275m in debtor-in-possession financing from members of the ad hoc group of lenders.

Arch Coal has filed various motions with the Bankruptcy Court in support of its reorganisation plan and expects to receive approval for them.