On October 5, 2016, Arch Coal (ARCH) emerged from bankruptcy through successful financial restructuring. Through bankruptcy proceedings, Arch Coal was able to reduce its debt load 93% to $363.0 million, which consists of a new term loan and capital leases.
Under the reorganization plan, the company’s senior lenders received cash and the vast majority of Arch’s new stock. Unsecured creditors, including bondholders, would receive $30.0 million in cash and 6% of the new stock
The company has third-party surety bonds in place covering 100% of its reclamation bonding requirements. Any outstanding debts owed by Arch Coal to suppliers that didn’t have collateral or security were wiped out.
Coal (KOL) peers Alpha Natural Resources (ANRZQ), Peabody Energy (BTU), and Walter Energy (WLTGQ), which had also opted for high-leverage inorganic growth, faced the same fate as Arch Coal—all three went bankrupt. We predicted these bankruptcies months before they happened, in the same order.
View more information: https://marketrealist.com/2017/09/how-arch-coal-emerged-from-chapter-11-bankruptcy/