One of the largest U.S. coal producers Cloud Peak files bankruptcy in USChristian Fernsby ▼ | May 18, 2019
Cloud Peak Energy announced that it has filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware.
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Cloud Peak Energy expects its mines will continue normal operations throughout the process, safely and efficiently meeting all customer commitments.
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.”
Mr. Marshall continued, “While we undertake this process, Cloud Peak Energy remains a reliable source of high-quality coal for customers.
“We thank our employees for their continued hard work and dedication, and appreciate the cooperation of our business partners and support of our customers as we work through this process.”
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 Cloud Peak’s prepetition secured noteholders.
Cloud Peak expects $10 million of the total DIP financing will be available on an interim basis.
The DIP financing, combined with Cloud Peak’s cash on hand and funds generated from ongoing operations, are expected to provide sufficient liquidity for Cloud Peak to continue operating in the ordinary course during the sale process.
Cloud Peak also announced that it has entered into an Amended and Restated Sale and Plan Support Agreement with holders of approximately 62% in dollar amount of Cloud Peak’s secured notes due 2021 and more than 50% in dollar amount of Cloud Peak’s unsecured notes due 2024.
The Support Agreement reflects, among other things, the support from two of Cloud Peak’s key creditor constituencies for Cloud Peak’s sale process, as well as the consent of the holders of the 2021 Notes to Cloud Peak’s use of cash collateral and priming liens to allow for the DIP financing. ■