On Tuesday, October 9, Westmoreland Coal Co. said it had entered into a restructuring support agreement (RSA) with members of an ad hoc group that hold approximately 76.1% of the company’s term loan, approximately 57.9% of its senior secured notes, and approximately 79.1% of its bridge loan. To implement the RSA, the company filed voluntary petitions for relief under chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division.
“After months of thoughtful and productive conversations with our creditors, we have developed a plan that allows Westmoreland to operate as usual while positioning Westmoreland for long-term success,” said Michael Hutchinson, Westmoreland interim CEO. “We will continue to work constructively with the ad hoc group and serve our customers in the normal course as we progress through an expedited process to restructure our long-term debt and other liabilities.
“Our goal is to emerge as a stronger Westmoreland, better positioned to grow and thrive.”
Westmoreland’s coal operations include surface coal mines in the United States and Canada, underground coal mines in Ohio and New Mexico, a char production facility, and a 50% interest in an activated carbon plant.
In addition, Westmoreland affiliate Westmoreland Resource Partners LP simultaneously filed for relief under chapter 11 of the Bankruptcy Code. WMLP has agreed to terms with its secured creditors on the use of cash collateral to fund WMLP’s normal course operations and allow WMLP to serve its customers during the course of WMLP’s chapter 11 case.
Westmoreland’s Canadian entities and Westmoreland Risk Management Inc. are excluded from the voluntary petitions. Westmoreland’s operations in the U.S. and Canada are cash flow positive and liquidity from operations combined with the company’s Debtor-In-Possession (DIP) financing is sufficient to continue operating its mines, without any expected impact to current output levels. Westmoreland anticipates no staff reductions as a result of the restructuring announcement.