The Alabama-based miner filed for relief in the U.S. Bankruptcy Court for the Northern District of Alabama in Birmingham. The case will only involve its U.S. units; those in Canada and the U.K. are not included.
Under the restructuring, some of its senior lenders will convert their debt to equity.
Walter said that the company has sufficient cash to ensure full payments to its vendors, suppliers and other business partners during reorganization.
It also confirmed that, if it cannot otherwise cannot satisfy the various conditions and milestones or confirm a Chapter 11 plan, it will pursue a sale “of substantially all…assets” in an auction through the court.
One industry group to speak up on Walter’s decision quickly was the United Mine Workers of America (UMWA), which pointed out that Walter’s financial woes are even more troubling considering that the company produces metallurgical coal for the steel market.
“The UMWA has long anticipated this move by Walter Energy and already has financial experts and bankruptcy lawyers in place working on this alongside our in-house bankruptcy team. We will be meeting with the company going forward to ensure our members’ voices are part of this process going forward,” President Cecil Roberts said.
The union also noted that its members’ employment terms will experience no changes, for now, as a result of the filing.
“Any changes that may come would only be as a result of a judge’s order months from now,” Roberts said. “It’s also important for retirees to know that their pensions are not affected by this filing, and their health care benefits will remain intact while this bankruptcy process plays out.”