Westmoreland Coal Co. disclosed that due to an uncertainty the company will meet debt obligations, its 2017 financial statements will likely contain a warning about the ability of the company to continue as a going concern.
The inclusion of a going concern explanatory paragraph and anticipated failure of certain financial covenants will cause Westmoreland to be out of compliance with terms of certain loan agreements unless they are waived or amended, the company reported. Without changes or waivers to the terms of two of its debt agreements, the company faces potential defaults on those agreements.
Westmoreland, which has coal mines in the U.S. and Canada as well as other assets, plans to issue a press release reporting its fourth-quarter and full-year 2017 financial results on April 2 after filing a notification of late filing with U.S. Securities and Exchange Commission on March 19. The company said that because of ongoing discussions with its creditors over its capital structure review, Westmoreland will not be holding a conference call for investors for the fourth quarter of 2017.
S&P Global Ratings lowered its credit rating on the company on March 9, citing a potential default or restructuring within six months. Westmoreland also recently hired advisers with a history of working with other energy companies through restructurings and recapitalizations to assist in a "capital structure improvement process."
This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global Inc. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings documents referred to in this news brief can be found here.