US coal producer Foresight Energy files for Chapter 11, enters debt restructuring deal

Houston — US coal producer Foresight Energy announced Tuesday it filed for Chapter 11 bankruptcy protection and entered a debt restructuring agreement with its creditors, according to a Securities Exchange Commission filing.

The Illinois Basin producer's restructuring agreement contemplates a comprehensive deleveraging of its balance sheet and about $1.1 billion reduction in the company's debt.

The filing for Chapter 11 comes after Foresight held negotiations with creditors as part of reorganization plans.

The agreement covers holders of 69% of Foresight's senior, secured, first-priority credit facility and 82% of its senior secured notes, the filing said.

In addition, holder of Foresight's first-priority credit facility get a 92.75% pro rata share of the reorganized company's equity, while holders of its senior secured noted get a 7.25% of the new equity.

Unsecured debtors will receive a pro-rata share of a cash pool, while equity and voting interests in the company will be canceled without recovery.

The company also said the reorganization case will be funded with a debtor-in-possession credit facility with a $175-million borrowing limit, and the credit facility with be refinanced as a $225 million senior secured first-priority term loan after it exits the Chapter 11 process.