Colorado-based Westmoreland Coal Co. on October 9 stated it had filed for Chapter 11 chapter, with the corporate reporting greater than $1.four billion in debt. The firm in its annual monetary report in April of this 12 months stated it was contemplating chapter in an effort to guard it from collectors.
Westmoreland, which has operated for 164 years, is the oldest unbiased U.S. coal firm. It is the fourth main U.S. coal producer to file for chapter safety prior to now three years. Alpha Natural Resources went into chapter 11 in 2015, and Arch Coal and Peabody Energy filed chapter petitions the next 12 months.
Coal producers have struggled lately with decrease demand for his or her product as U.S. coal-fired energy technology has diminished because of environmental rules and the rise of pure gas-fired and renewable technology, resulting in the closure of dozens of coal crops. Westmoreland closed its coal-fired Roanoke Valley Energy Facility in Weldon, North Carolina, in 2017. The firm earlier this 12 months disclosed a significant buyer in Ohio that accounted for 14% of its income had not renewed coal provide contracts that expire on the finish of this 12 months. Reports say that buyer is American Electric Power, which this week confirmed it would shut its 1.59-GW coal-fired Conesville energy plant in Ohio by the top of May in 2020, two years sooner than initially deliberate.
Westmoreland, headquartered in Englewood, Colorado, a Denver suburb, in a press release stated it doesn’t anticipate its operations to be interrupted by the submitting. The firm, which has about three,000 employees and operations in a number of states, together with the Powder River Basin in Wyoming and Montana, and Canada, additionally stated it doesn’t plan workers reductions. Its chapter submitting within the U.S. Bankruptcy Court in Houston, Texas, stated the corporate has entered a restructuring settlement with its lenders.
Michael Hutchinson, who has served as the corporate’s interim CEO since November 2017 and served on the corporate’s board since 2012, in a press release Tuesday stated, “After months of considerate and productive conversations with our collectors, we have now developed a plan that permits Westmoreland to function as regular whereas positioning Westmoreland for long-term success. We will proceed to serve our clients within the regular course as we progress by way of an expedited course of to restructure our long-term debt and different liabilities.”
The firm in May of this 12 months secured a $110 million financing settlement. Hutchinson on the time stated, “This financing additionally gives us with the monetary flexibility to develop a longer-term plan whereas soliciting enter from a variety of our key constituents, who all need to see Westmoreland proceed to develop and prosper. In the months forward, we are going to proceed our analysis and decide the suitable strategic, operational and monetary construction to help the continued future development of our enterprise.”
Jeffrey Stein, Westmoreland’s chief restructuring officer, stated within the chapter submitting that “coal mining companies throughout the U.S. and around the globe are feeling stress on account of a wide range of macroeconomic components, and the destiny of many of those corporations is but to be decided. President Donald Trump has made help of the coal business a precedence of his administration and the Environmental Protection Agency is rolling again a number of rules that restricted greenhouse gasoline (GHG) emissions from energy crops. Trump’s EPA just lately unveiled the Affordable Clean Energy (ACE) ruleas a substitute for President Barack Obama’s Clean Power Plan, which was by no means enacted amid quite a few authorized challenges.
The ACE rule offers states extra leeway to develop their very own GHG rules.
Mary Anne Hitt, senior director of the Sierra Club’s Beyond Coal…