Coal giant files for bankruptcy protection

WTRF TV

Murray Energy Corp. today announced it had filed for Chapter 11 bankruptcy protection, which the company said would allow it to access $350 million in new debtor-in-possession financing as it works with lenders to restructure.

"Although a bankruptcy filing is not an easy decision, it became necessary to access liquidity and best position Murray Energy and its affiliates for the future of our employees and customers and our long-term success", the company's founder and chief executive officer, Robert Murray, said in a statement.

The Murray mines will continue operation during bankruptcy as part of a new company-Murray NewCo.

Robert Moore was CFO at the company before being named CEO to replace Murray under the restructring plan. Robert Murray will remain as the company's chairman.

A Trump ally with influence on the administration, Murray in the first weeks of Trump's tenure presented incoming Cabinet members and other administration figures with a written wish list of environmental regulations he hoped to see knocked down to ease what he depicted as a regulatory burden on the sagging coal industry.

The bankruptcy had been brewing: Murray's Ohio-based company sought more time on debt payments due earlier this month, a choice that similarly preceded the bankruptcy filing of the Western miner Cloud Peak Energy Inc. earlier this year and the bankruptcy of coal giant Alpha Natural Resources Inc.in 2015 (Greenwire, March 19).

In the wake of dwindling domestic demand for electricity-making thermal coal, Murray tapped export markets to stay afloat, however, a sharp drop in export prices proved too onerous for the company, prompting it to enter forbearance agreements with its creditors early this month.

Murray Energy, the nation's largest underground coal mining operation, produces about 76 million tons of coal annually, and holds 3 billion tons of coal reserves. But as coal generators close, that has posed challenges for the company's bottom line.

Bob Murray has been active in conservative politics in West Virginia and across the country. A Murray subsidiary operates seven mining facilities in Kentucky.

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West Virginia Senate President Mitch Carmichael said the bankruptcy filing was surprising even with the evident struggles in the coal business, adding that he's concerned about pensions and worker protections for the business' almost 7,000 employees.

According to the company, the restructuring agreement contemplates that substantially all of Murray Energy's debt will be eliminated.

West Virginia Senate President Mitch Carmichael described the filing as a surprise. He hosted a private fundraiser for the president's 2020 campaign earlier this year in Wheeling, W.Va., and donated almost $300,000 personally to the Trump Victory Committee in the most recent reporting period (Greenwire, Oct. 16).

Trump's gusto for "clean" and "beautiful" coal and coal miners helped to make Appalachian coal country one of Trump's most fervent bases of support as he racked up big wins in West Virginia, Ohio, Kentucky and other states. In the letter, he warned the White House that failure to issue the order would spark the immediate bankruptcies of his company and a major customer.

Murray's corporate headquarters is located just west of St. Clairsville in Belmont County, Ohio, while its American Energy Co. and Century Mine thermal coal site are situated near Beallsville in Monroe County, Ohio.

The Maryland Democrat also said he found the bankruptcy news puzzling given the administration's repeated promises to boost the coal industry.

The reorganization of top leadership is part of Murray Energy Corp.'s Chapter 11 bankruptcy filing, which came Tuesday.

The coal tycoon was also outspoken during and after the 2007 Crandall Canyon mine collapse in Utah that trapped six Murray miners, criticizing the miners' union and dismissing the Mine Safety and Health Administration's findings of multiple violations preceding the collapse.

Murray bought a controlling stake in Foresight Energy LP and acquired Armstrong Energy Inc. assets past year in the Illinois Basin, a region favorable for the export market (Greenwire, Jan. 25, 2018).

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