America’s Second Biggest Coal Miner Files for Bankruptcy

January 11, 2016, 3:02 PM UTC
Obama's New Proposed Regulations On Coal Energy Production Met With Ire Through Kentucky's Coal Country
CATTLETSBURG, KY - JUNE 3: A tractor trailer semi drives by a mound of coal after delivering a truckload of coal to Arch Coal Terminals on Tuesday, June 3, 2014 in Cattletsburg, Ky. New regulations on carbon emissions proposed by the Obama administration have angered politicians on both sides of the aisle in energy-producing states such as Kentucky and West Virginia. (Photo by Luke Sharrett/Getty Images)
Photograph by Luke Sharrett — Getty Images

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.

Arch Coal is the fourth coal miner, after Walter Energy (WLT), Alpha Natural Resources (ANR), and Patriot Coal, to file for bankruptcy.

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.