Murray Energy Holdings Co. and certain subsidiaries filed for Chapter 11 bankruptcy protection following months of financial distress.
The move, which will occur under the guidance of new President and CEO Robert Moore, replacing Robert Murray, will allow the company to access $350 million in new debtor-in-possession financing.
The bankruptcy filing is necessary to implement a restructuring support agreement with an ad hoc lender group holding more than 60% of the approximately $1.7 billion in claims under the company's superpriority credit and guaranty agreement.
Murray Energy is the nation's largest privately owned coal miner and produced the third-most coal among all U.S. producers in 2018, ousting Cloud Peak Energy Inc. from the top three with nearly 60.5 million tons last year.
The Ohio-based coal producer announced earlier this month that it had entered into forbearance agreement after it failed to make amortization and interest payments that were due Sept. 30. The coal producer amended its forbearance agreements and extended the period through Oct. 28.
S&P Global Ratings and Moody's downgraded their credit ratings on the company as a result, and Ratings further reduced its ratings to "default" after the miner missed payments on loans during a grace period that ended Oct. 7.
The missed debt payments suggested the company might seek bankruptcy protection, despite founder and Murray's vow to be the "last man standing" in the coal industry. Murray has also been critical of other coal producers that turned to the bankruptcy court and shed debt as well as financial obligations.
The CEO frequently condemned former President Barack Obama, blaming the president's policies restricting both the mining and burning of coal in the U.S. for the industry's financial distress.
Murray has blamed the industry’s financial distress on policies restricting both the mining and burning of coal in the U.S. and has hailed the Trump's administration's loosening of restrictions.
However, power generators continue to announce the retirement of large swaths of their coal fleets.
Moody's adjusted its outlook on the coal sector from stable to negative in August, due largely to recently declining seaborne prices coupled with reduced domestic demand for the fuel.
"As we think about prospects for companies over the next several years, we're going to pay more and more attention to specific commercial strategies around exporting: who's developing which markets, which relationships, how and so forth," said Benjamin Nelson, senior credit officer and lead coal analyst at Moody's, in a September interview. "I'd also say that producers at the lower end of our ratings spectrum that have meaningful exposure to the export market, like Foresight or Murray, that's where you'll see the most meaningful stress."
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