It's a big blow for American coal.
Arch Coal, the second-largest coal miner in the U.S., and its domestic subsidiaries filed for Chapter 11 bankruptcy to facilitate a restructuring with a group of lenders that hold more than 50% of its debt, the company said.
Arch Coal aci said on Monday it reached an agreement with its lenders that will eliminate more than $4.5 billion in debt from the company’s balance sheet.
The company said it has sufficient capital to run its operations smoothly throughout the restructuring process, and expects mining operations and customer shipments to continue uninterrupted.
The Missouri-based company was widely expected to go bankrupt after delaying a $90 million interest payment due in December last year.
In November, it reported a $2 billion third-quarter net loss and said it could have trouble servicing a $5.1 billion debt.
The company had ended a proposed debt swap previously, seen as key to delaying the prospects of bankruptcy, after opposition from a group of senior lenders who said that the terms of the deal jeopardized their return.
Arch Coal ran into debt trouble after purchasing International Coal Group for $3.4 billion during a coal price peak in 2011.