Arch Coal filed with the U.S. Bankruptcy Court an Amended Joint Plan of Reorganization and related Disclosure Statement. According to a corporate release, the Plan is supported by certain of the Company’s senior secured lenders that hold more than 66 2/3% of its first lien term loan.
The Disclosure Statement notes, “The Plan that the Debtors have filed provides that holders of General Unsecured Claims will receive their pro rata share of the Debtors’ unencumbered assets in the form of (i) cash, subject to reductions for certain fees and, potentially, adequate protection claims and (ii) shares of Prairie Holdings, which is the Debtor that owns a 49% interest in Knight Hawk Holdings, but only if it is judicially determined that Prairie Holdings’ interests in Knight Hawk Holdings, are unencumbered.”
The Disclosure Statement continues, “The consideration for the global settlement is to be provided by the holders of First Lien Credit Facility Claims, who will waive the Prepetition Lender Adequate Protection Claim in respect of any diminution in the value of the Prepetition Collateral from the Petition Date through and including June 22, 2016 and, potentially, through the Effective Date, subject to certain exceptions. The Debtors will continue to pursue a resolution among their creditors regarding distributions to holders of General Unsecured Claims in an effort to reach an agreement on a fully consensual plan of reorganization.”
John W. Eaves, Arch Coal’s chairman and C.E.O., states, “We are pleased to submit a plan that will strengthen our balance sheet and enable us to continue our operations and reclamation activities, as we further advance our efforts to position Arch for long-term success. With low-cost production in strategic market segments and the most advantaged coal supply regions, Arch is well-equipped to emerge as a strong competitor. We are confident that, upon emergence, Arch will be poised to prosper in the quickly evolving coal marketplace.”
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