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Westmoreland Coal hires advisers to help improve balance sheet health

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Westmoreland Coal hires advisers to help improve balance sheet health

Westmoreland Coal Co. hired advisers to assist in its "capital structure improvement process" and to improve the health of its balance sheet.

CFO Gary Kohn said in a March 7 release that the coal producer continues to work on dealing with the debt of its San Juan operation and its master limited partnership as it seeks "a holistic solution for all of Westmoreland."

The advisers employed, Alvarez & Marsal and Centerview Partners, both have a history of working with other energy companies through restructuring and recapitalization.

Westmoreland also announced that it expects 2017 adjusted EBITDA to fall within the higher end of its previously issued range of $250 million to $270 million, while free cash flow should land in the middle of the previously issued guidance range of $90 million to $115 million.

"Our team remained focused on operations and ensured we met our adjusted EBITDA and free cash flow expectations for the year," said Michael Hutchinson, interim CEO, in a release. "As we entered 2018, we reassessed our Coal Valley strategy and seized the opportunity to lock in favorable economics. On the strength of Newcastle pricing, we secured positive Coal Valley EBITDA and cash flow for 2018 through locked-in offtake commitments and secured rail and port contracts for the large majority of our production this year."

In a separate March 7 release, Westmoreland Resource Partners LP announced that it had entered an agreement with lenders to waive any actual or potential default related to a failure to have certain cash management accounts subject to cash management agreements, or a failure to deliver an unqualified audit opinion in connection with certain audited financial statements.

The waiver ends on the earliest of 11:59 p.m. on May 15 or the occurrence of any unwaived default.

Westmoreland also adopted an incentive plan including retention bonuses applying to certain executives for the fiscal year 2018, according to another release.

The coal producer was attempting to calm investor concerns in November 2017 after poor quarterly earnings results and the departure of its CEO.

Analysts also lowered their price targets for Westmoreland, while S&P Global Ratings downgraded its credit rating in November 2017.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.