Arch Coal files for bankruptcy, reaches $US4.5b debt deal with lenders

Show comments

Arch CoalĀ filed for bankruptcy and reached an agreement with a majority of its lenders to restructure its debt, the company said in a statement Monday.

Mining operations and deliveries to customers won't be interrupted by the reorganisation, which will remove $US4.5 billion in debt from its balance sheet, according to the statement. The company filed for bankruptcy in the United States Bankruptcy Court for the Eastern District of Missouri.

"The company believes it has sufficient liquidity to continue its normal mining activities and to meet its obligations in the ordinary course," it said.

US coal miners are struggling through the sector's worst downturn in decades amid a global oversupply and slowing Chinese demand. The thermal coal used by power plants is being undermined by cheap natural gas and tougher emissions standards. Central Appalachian coal fell 13 per cent in 2015, capping a fifth annual decline on the New York Mercantile Exchange. Prices closed at $US44.33 a metric ton on Friday.

Last month, Arch Coal exercised a 30-day grade period to pay about $US90 million in interest payments due Dec. 15 on bonds. Also in December, the New York Stock Exchange warned the company it doesn't meet the standards to remain listed.

Arch Coal rose 5.4 percent to 83.25 cents on Friday, giving it a market capitalisation of $US17.7 million, according to data compiled by Bloomberg. The company has fallen 94 percent in the past year.