Murray Energy Corp. enters into restructuring support agreement and files chapter 11

October 29, 2019

Murray Energy Corp., the largest underground coal mining company in the United States announced on Oct. 29 that it has entered into a restructuring support agreement (RSA) with an ad hoc lender group holding more than 60 percent of the approximately $1.7 billion in claims under the company’s Superpriority Credit and Guaranty Agreement (SCGA).

As part of the reorganization deal, the group of creditors will also provide $350 million to allow Murray Energy to continue operations in bankruptcy, subject to court approval.

To implement the RSA, Murray Energy, including certain of its subsidiaries, filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code in the United States Bankruptcy Court for the Southern District of Ohio on October 29, 2019, Murray Energy said in a news release.

Voluntary petitions have also been filed for all of the company’s main operating subsidiaries, including American Energy Corp., The Harrison County Coal Company, The Marion County Coal Company, The Marshall County Coal Company, The Monongalia County Coal Company, The Ohio County Coal Company, UtahAmerican Energy, Inc., Murray South America, Inc., The Muhlenberg County Coal Company and The Western Kentucky Coal Company, LLC, which operate mining complexes located in Ohio, West Virginia, Utah, Kentucky and Colombia.

Foresight Energy LP and Foresight Energy GP LLC, including their direct and indirect subsidiaries, as well as Murray Metallurgical Coal Holdings, LLC, Murray Eagle Mining, LLC, Murray Alabama Minerals, LLC, Murray Maple Eagle Coal, LLC, Murray Alabama Coal, LLC and Murray Oak Grove, LLC did not file voluntary petitions and are not part of the company’s Chapter 11 Cases.

The company intends to finance its operations throughout Chapter 11 with cash on hand and access to a $350 million new money debtor-in-possession financing facility, subject to Bankruptcy Court approval. Lenders party to the RSA have committed to provide the full amount of the DIP Facility, and other lenders under the company’s SCGA will be given the opportunity to provide funding under the DIP Facility. The proceeds of the DIP Facility will be used to refinance borrowings under the company’s existing ABL credit facility and to support ordinary course operations and payments to employees and suppliers throughout the restructuring process.

Under the RSA, the Ad Hoc Lender Group has agreed to form a new entity, Murray NewCo, to serve as a “stalking horse bidder” to acquire substantially all of the company’s assets by credit bidding its debt under a Chapter 11 plan, subject to an overbid process. The RSA contemplates that substantially all of the company’s prepetition funded debt will be eliminated.

Robert D. Moore, has been named President and CEO of Murray Energy and Murray Energy Corp.

Robert Murray, the company’s 79-year-old founder and chief executive officer, is expected to remain as Murray Energy’s chairman of the board.
“We appreciate the support of our lenders for this process, many of whom have been invested with the company for a long time,” Moore said in a statement. “I am confident the DIP Facility provides the Company with adequate liquidity to get payments to our valued trade partners and continue operating in the normal course of business without any anticipated impact to production levels.”

Company founder Robert E. Murray noted, “Although a bankruptcy filing is not an easy decision, it became necessary to access liquidity and best position Murray Energy and its affiliates for the future of our employees and customers and our long term success.”






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