Paringa’s Hartshorne Mining Group Files for Chapter 11 Bankruptcy
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Hartshorne Mining Group and its U.S. affiliates said to facilitate a value-maximizing sale of its operating Poplar Grove coal mine, undeveloped Cypress coal project and other business assets, it filed voluntary Chapter 11 petitions in the United States Bankruptcy Court for the Western District of Kentucky. The company intends to continue mining operations during the bankruptcy and sale process, after transitioning from two mining units to one mining unit.
In support of its ongoing operations, Hartshorne has filed a series of “First Day Motions” with the court that, subject to approval, will allow the company to conduct mining operations in compliance with all environmental and applicable regulations, maintain its employee compensation and benefits, continue customer shipments, and make payments to suppliers in full for goods and services provided after the filing date.
Hartshorne has obtained a commitment for debtor-in-possession financing in the amount of $7.5 million from several of its current senior secured lenders for which Tribeca Global Resources Credit will serve as agent. The financing is expected to provide sufficient liquidity to fund the company’s operations while it executes a sale process of its assets.
“Despite our best efforts and progress, operational and technical challenges continue to prevent us from achieving anticipated volumes. After a thorough evaluation of our near-term financial outlook and operational performance, Hartshorne’s management team, board of managers, and advisors have determined that additional financing is needed to continue our efforts. Accordingly, we are pursuing an accelerated sale process to identify potential new owners who can continue this work while optimizing value for all stakeholders including our lenders, employees, customers, and suppliers. Chapter 11 gives us the time, protections, and access to additional near-term financing to complete a sale process and determine the appropriate path forward,” said a company spokesman.
In connection with the debtor-in-possession financing agreement, the company and its lenders agreed that the best way to maximize the value of the company is to conduct a marketing process for the sale of the company’s assets in the Chapter 11 cases.
Parties interested in participating in the sale process should contact the company’s investment bank, Perella Weinberg Partners (Brennan Smith, .(JavaScript must be enabled to view this email address), Kevin Cofsky, .(JavaScript must be enabled to view this email address), Jacob Czarnick, .(JavaScript must be enabled to view this email address), and John Messina, .(JavaScript must be enabled to view this email address)).
About Paringa
Paringa Resources Ltd is an emerging US based energy provider developing the high margin, low capex Buck Creek Mining Complex located in the growing Illinois Coal Basin.
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