The company will seek the necessary immediate relief from the Bankruptcy Court that will allow normal business operations to continue uninterrupted while in Chapter 11, with coal being mined, customer commitments honoured, and wages and benefits for Alpha's affiliated employees paid, Alpha chairman and CEO Kevin Crutchfield said in a statement.
“While a difficult decision, this voluntary Chapter 11 filing is the right strategy at the right time for the future of our business,” he said.
“It will enable us to build on the significant steps we have taken over the past several years to restructure our debt and protect our operations. I am confident Alpha will emerge from this process as a stronger company, with a diversified resource base and better positioned for the future.”
Alpha Natural Resources affiliates operate more than 50 underground and surface mines and more than 20 coal preparation facilities in Virginia, Kentucky, West Virginia, Pennsylvania and Wyoming.
Crutchfield said the US coal industry was in an unprecedented period of distress with increased competition from natural gas, an oversupply in the global coal market, historically low prices due to weaker international and domestic economies, and increasing government regulation that has pushed electric utilities to transition away from coal-fired power plants.
Neither Alpha nor the US coal industry should be thought of in the past tense while the sector will likely get smaller, coal will continue to play a critical role in providing affordable and reliable electricity and in the production of steel for infrastructure, according to Crutchfield.
“The change and challenges the US coal industry has experienced over the last several years are greater than any in the past three decades,” he said. “There is no doubt more uncertainty ahead, but also transformational opportunity in the coal sector for those who make proactive, strategic decisions.”
The company has secured an 18-month debtor-in-possession (DIP) financing package of about $US692 million, arranged by Citigroup, and led by a group of both its first and second lien lenders.
