The Westmoreland Coal Company, which operates mines in the Estevan and Coronach areas, has filed for Chapter 11 bankruptcy in the U.S., but its Canadian operations are not affected by the filing.
The company announced Tuesday it has entered into a restructuring support agreement (RSA) with members of an ad hoc group of lenders that hold approximately 76.1 per cent of its term loan, approximately 57.9 per cent of its senior secured notes, and approximately 79.1 per cent of its bridge loan.
To implement the RSA, Westmoreland today filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division.
In addition, Westmoreland affiliate Westmoreland Resource Partners (WMLP) simultaneously filed for relief under chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division.
WMLP has agreed to terms with its secured creditors on the use of cash collateral to fund WMLP’s normal course operations and allow WMLP to serve its customers during the course of WMLP’s chapter 11 case.
WMLP intends to continue working constructively with an ad hoc group of its secured lenders in connection with a value-maximizing sale and marketing process that began prior to the commencement of WMLP’s chapter 11 case.
Westmoreland’s Canadian entities and Westmoreland Risk Management, Inc. are excluded from the voluntary petitions. Westmoreland’s operations in Canada and the U.S. are cash flow positive and liquidity from operations combined with the company’s debtor-in-possession financing is sufficient to continue operating its mines in the normal course of business, without any expected impact to current output levels. Westmoreland anticipates no staff reductions as a result of the restructuring announcement.
“After months of thoughtful and productive conversations with our creditors, we have developed a plan that allows Westmoreland to operate as usual while positioning Westmoreland for long-term success,” said Michael Hutchinson, Westmoreland’s interim chief executive officer. “We will continue to work constructively with the ad hoc group and serve our customers in the normal course as we progress through an expedited process to restructure our long-term debt and other liabilities.
“Our goal is to emerge as a stronger Westmoreland, better positioned to grow and thrive. We appreciate the ongoing support of our business partners, customers and creditors throughout this process. In addition, we thank our passionate Westmoreland team members for their tireless dedication and commitment to building a stronger Westmoreland.”
