Lawers for Blackjewel LLC, the coal mine operator that was forced to shutter two mines in Wyoming’s Powder River Basin said the company has secured new financing, the Casper Star Tribune reported.
“The Debtors have obtained additional debtor-in-possession financing from a new third party that is substantially final as to its terms and is subject to the third party’s final internal approval which is expected no later than (Wednesday) morning,” the company stated in court documents.
If the deal is approved by the judge, the company would avoid having to resort to Chapter 7 bankruptcy, which would result in the liquidation of two Wyoming mines — the Eagle Butte and Belle Ayr mines — and the loss of hundreds of miners’ jobs in Wyoming, something the company pointed out in its court filings.
The two mines, Eagle Butte and Belle Ayr mines are the fourth- and sixth-largest producing coal mines in the country. When they were closed on July 1 about 700 employees were left without a job.
Blackjewel closed the mines after a previous lender had withdrawn during the company’s Chapter 11 bankruptcy financing.
The deal proposed in the court filings, Blackjewel’s lawyers argued, were something of an ultimatum, with the company saying that after hours of working to secure a lender, “no other option” was viable.
“As should be clear following the hearing on July 1, the Debtors stand at the precipice of conversion to chapter 7,” court documents said. “If these Debtors convert to chapter 7, the mines will be abandoned, equipment will be stolen or destroyed and the value of the Debtors’ assets will be devastated. As should be clear following the events of the hearing on July 1, these Debtors are out of options. Without the DIP financing now proposed, these Debtors’ cases will convert to chapter 7 cases and immense value will be lost.”
It’s been a tumultuous year for mines in the Powder River Basin. In May, Cloud Peak Energy declared bankruptcy. The coal giant owns the Antelope and Cordero Rojo mines. Last month, Peabody and Arch Coal announced a massive deal. While not technically a merger, it would allow the companies to operate the nation’s two biggest coal mines — Black Thunder and North Antelope Rochelle — as a single complex.