Westmoreland Coal Co. secured a new financing commitment in the form of a $110 million delayed draw term loan from an ad hoc group of its existing secured creditors holding roughly 79% of its term loan and senior secured notes.
The financing package includes $90 million that is immediately available to Westmoreland, plus a delayed draw option allowing the company to draw $20 million. The term loan is secured by substantially all of Westmoreland's U.S. and Canadian assets.
The loan could be converted into a post-petition financing package if Westmoreland were to pursue an in-court restructuring. The company notified investors April 2 that it may seek Chapter 11 bankruptcy protection or be subject to an involuntary petition for bankruptcy, and said its auditors have expressed "substantial doubt" about the company's ability to continue as a going concern.
"Securing this financing is a meaningful step towards simplifying our capital structure while providing additional liquidity to the parent," Michael Hutchinson, Westmoreland's interim CEO, said in a May 22 release. "This financing also provides us with the financial flexibility to develop a longer-term plan while soliciting input from a number of our key constituents, who all want to see Westmoreland continue to grow and prosper."
Proceeds from the financing will be used to fully repay Westmoreland's San Juan term loan and its existing asset-based revolvers.
Neither Westmoreland Resource Partners LP nor any of its subsidiaries will be obligors under the new financing package, the company said.
