The country’s second-biggest coal supplier filed for Chapter 11 bankruptcy protection, the company announced Monday morning.
Arch Coal Inc. said it needs to eliminate more than $4.5 billion in debt. John W. Eaves, the company’s chairman and CEO, said the filing, which will allow it to restructure finally, was an attempt to pivot the company toward the future.
“After carefully evaluating our options,we determined that implementing these agreements through a court-supervised process represents the best way to solidify our financial position and strengthen our balance sheet,” Eaves said. “We are confident that this comprehensive financial restructuring will further enhance Arch’s position as a large-scale, low-cost operator.”
The company has enough money to continue normal mining activities and meet its obligations. As of Monday, the company had $600 million in cash and short-term investments.
In a letter to employees, Eaves wrote that the announcement wouldn’t have any impact on employee pay or health benefits.
The company already has reached an agreement with its primary creditors to restructure about $1.9 billion in debt.
“We will continue to provide our customers with exceptional service as we move through this process, while maintaining and further reinforcing our position as an industry leader in safety, environmental stewardship and productivity,” Eaves said.
The news was heralded by some environmentalists.
The Sierra Club Coalition said Arch sowed the seeds of its own financial downfall.
The group said the company went on a “spending spree” when the market for coal was much better and, in the subsequent downturn, incurred more than $500 million in losses during the past year.
Arch’s executives were highly paid while the company failed the adjust to new public health worries over pollution and increasing demand for clean energy, the Sierra Club said.
“The bankruptcy of America’s second-largest coal company, which comes on the heels of an historic, universal climate agreement in Paris, is a clear signal that coal is a fuel of the past, and that America’s future will be powered by clean energy that doesn’t harm public health or our climate,” said Mary Anne Hitt, director of the Sierra Club’s Beyond Coal campaign.
