Murray Energy Corp. (MEC) announced it did not make amortization or interest payments that were due September 30 to its major lenders and has entered into forbearance agreements with them. The lenders have agreed to not take legal action against MEC until October 14.
These lenders hold in excess of 50% of outstanding loans under its Superpriority Credit and Guaranty Agreement (SCGA) and with lenders holding in excess of 50% of outstanding loans under its ABL and FILO credit facilities.
Murray Energy said this will allow it to continue discussions with its lenders about various options to strengthen the company’s business, improve its liquidity position, deleverage its balance sheet, and achieve a more sustainable capital structure to support the long-term business plan.
On Tuesday, U.S. coal miner Foresight Energy LP failed to make its own interest payment, invoking a 30-day grace period to evaluate options, according to Bloomberg. In 2015, Murray bought a controlling stake in the St. Louis, Missouri-based company that hasn’t posted an annual profit since 2014.
A couple of weeks ago, Murray Maple Eagle Coal LLC, a subsidiary of MEC, said it was temporarily ceasing operations at the Maple Eagle No. 1 Mine, the Sycamore Surface Mine and the Maple Eagle Preparation Plant, all in West Virginia, due to depressed market conditions and a significant drop in the price of coal.
In February, Murray Energy Corp. idled the KenAmerican Resources Inc. Paradise No. 9 mine in West Virginia due to market conditions, the company said.