Alpha Natural Resources’ Plan of Reorganization Confirmed by U.S. Bankruptcy Court
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Alpha Natural Resources, Inc.‘s plan of reorganization has been approved, contingent upon the finalization of certain definitive documentation and the entry of an order in the coming days, by the United States Bankruptcy Court for the Eastern District of Virginia. The plan will become effective upon Alpha’s emergence from Chapter 11 bankruptcy protection, which is expected to occur in late July.
“Confirmation of Alpha’s plan represents the final court milestone in a complex, one-year restructuring process. We appreciate the commitment of our workforce, the trust of our customers, and the ultimate support of our creditors and broader stakeholders in helping to pave the way for Alpha’s successful emergence as a more streamlined, financially secure company with attractive prospects for the future. I also want to thank our lender group, who have provided steadfast support for our plan and worked tirelessly with Alpha and multiple stakeholder constituencies to resolve challenges and reach positive outcomes,” said Kevin Crutchfield, chairman and CEO of Alpha.
Upon emergence, Alpha is expected to operate as a privately held company, positioned well to satisfy its environmental obligations on an ongoing basis.
In addition to plan confirmation, and consistent with the previously filed asset purchase agreement, the court also approved Alpha’s sale of certain core coal assets to Contura Energy, Inc., a new company formed by a group of Alpha’s first lien lenders. The sale, which is scheduled to close concurrently with Alpha’s emergence, includes the company’s two Powder River Basin mine complexes in Wyoming, the Nicholas, McClure, and Toms Creek mine complexes in West Virginia and Virginia, all of the company’s Pennsylvania coal operations and certain reserves, the company’s interest in the Dominion Terminal Associates coal export terminal in Newport News, Virginia, and certain other assets, including working capital.
In addition to operating as an independent, competitive entity in the U.S. and international coal markets, Contura Energy will provide specified contingent credit support for reorganized Alpha in the aggregate amount of $35 million, from the effective date of emergence through September 2018, subject to the terms and conditions of the global settlement term sheet filed with the court. Over the course of the next ten years, Contura has agreed to also make contributions of up to $100 million into certain restricted cash accounts to help fund the ongoing reclamation activities of reorganized Alpha, in addition to other support to be provided.
Alpha and certain of its wholly-owned subsidiaries filed voluntary petitions to reorganize under Chapter 11 of the United States Bankruptcy Code on August 3, 2015. The company filed its preliminary plan of reorganization on March 8, 2016, and voting on the plan concluded on June 29, 2016.
About Alpha Natural Resources
Alpha Natural Resources is one of the largest and most regionally diversified coal suppliers in the United States. With affiliate mining operations in Virginia, West Virginia, Kentucky, Pennsylvania and Wyoming, Alpha supplies metallurgical coal to the steel industry and thermal coal to generate power to customers on five continents. Alpha is committed to being a leader in mine safety with their running right safety process, and an environmental steward in the communities where its affiliates operate.
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