Coal company files for Chapter 11 bankruptcy

 

A Wyoming coal company has filed for Chapter 11 bankruptcy. Cloud Peak Energy Inc., the only pure-play Powder River Basin coal company said it anticipates to continue operations of its mines as it works its way through the U.S. Bankruptcy Court for the District of Delaware.

Colin Marshall, President and Chief Executive Officer of Cloud Peak Energy, commented, “Over the past several months, Cloud Peak Energy has thoroughly evaluated strategic alternatives to address the challenging market conditions in our industry. We believe, at this time, that a sale process in Chapter 11 will provide the best opportunity to maximize value for Cloud Peak Energy.”

In conjunction with the filing, and subject to court approval, Cloud Peak Energy has received a commitment for approximately $35 million in debtor-in-possession (“DIP”) financing from certain of the Company’s prepetition secured noteholders. The Company expects $10 million of the total DIP financing will be available on an interim basis. The DIP financing, combined with the Company’s cash on hand and funds generated from ongoing operations, are expected to provide sufficient liquidity for the Company to continue operating in the ordinary course during the sale process.

Cloud Peak Energy has filed a number of customary motions with the court seeking authorization to support its operations while this process is ongoing, including authority to continue payment of employee wages, salaries and benefits without interruption. The Company intends, subject to court approval, to pay vendors, suppliers and other providers essential to the Company’s business in full for goods and services provided after the filing date. The Company also expects to continue entering into and fulfilling orders under sales contracts with customers in the ordinary course of business. The Company expects to receive court approval for these requests.

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