Cloud Peak Energy, which bills itself as the only pure-play Powder River Basin coal company, has announced it’s filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code.
The Wyoming-based company said it will continue marketing all its assets, which includes three surface mines in the PRB. The 27-page filing (reviewed by Kallanish Energy) also includes 27 affiliated companies.
“Over the past several months, Cloud Peak Energy has thoroughly evaluated strategic alternatives to address the challenging market conditions in our industry. We believe, at this time, that a sale process in Chapter 11 will provide the best opportunity to maximize value for Cloud Peak Energy,” said Colin Marshall, Cloud Peak president and CEO.
According to its Chapter 11 filing with the U.S. Bankruptcy Court of Delaware, it has assets totaling $928.66 million, and $634.98 million in liabilities.
Cloud Peak’s largest unsecured creditors include Wilmington Trust, holding $58.4 million in bonds, railroad giant BNSF, owed $8.12 million in transportation bills, and Nelson Brothers Mining Services, owed $4.26 million in trade vendor accounts receivable.
In conjunction with the filing, and subject to court approval, Cloud Peak Energy has received a commitment for roughly $35 million in debtor-in-possession (Dip) financing from certain of the company’s pre-petition secured noteholders. The company expects $10 million of the total Dip financing will be available on an interim basis.
Cloud Peak also announced it’s entered into an Amended and Restated Sale and Plan Support Agreement, with holders of roughly 62% in dollar amount of the company’s secured notes due in 2021, and more than 50% in dollar amount of the company’s unsecured notes due in 2024.
Vinson & Elkins is serving as Cloud Peak’s legal advisor, Centerview Partners is acting as investment banker and FTI Consulting is serving as financial advisor.
Davis Polk & Wardwell is serving as legal advisor and Houlihan Lokey is acting as financial advisor to the ad hoc group of holders of 2021 notes and the Dip lenders.
This post appeared first on Kallanish Energy News.