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Patriot Coal Exit Financing Motion Filed

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Patriot Coal filed with the U.S. Bankruptcy Court a motion for entry of an order authorizing the Debtors, in connection with their efforts to obtain exit financing, to (i) enter into documents in connection with exit financing, (ii) incur and pay associated fees, costs and expenses and (iii) furnish related indemnities. The motion explains, “The Debtors are now well-positioned to complete the last critical step of their restructuring plan: securing senior exit financing in order to fund the Debtors’ obligations under the Debtors’ Second Amended Joint Plan of Reorganization under Chapter 11 of the Bankruptcy…and provide sufficient working capital to the reorganized Debtors upon emergence from chapter 11. Indeed, during the past few weeks, the Debtors, with the assistance of their investment banker, Blackstone Advisory Partners, L.P., have engaged in an extensive process to obtain exit financing proposals from various financial institutions. After reviewing several proposals and negotiating with the parties, the Debtors have selected the Engagement Parties to structure, arrange and, as applicable, syndicate: (a) an exit senior secured term loan facility in an aggregate principal amount of $250,000,000 (the ‘Term Loan Facility’); (b) an exit senior secured asset based revolving credit facility in an aggregate principal amount of $125,000,000 (the ‘ABL Facility’); and (c) a letter of credit facility in an aggregate amount not to exceed $201,000,000 (the ‘L/C Facility’ and, together with the Term Loan Facility and the ABL Facility, the ‘Exit Facilities’).” The motion continues, “Exit financing is the last essential component for the Debtors’ Plan and ultimate successful emergence from these chapter 11 cases. Moreover, obtaining the financing contemplated by the Exit Facilities are conditions to the consummation of the rights offerings and the effectiveness of the settlement with Peabody, both of which are cornerstones of the Plan and the Debtors’ successful restructuring. The Debtors believe, in their sound business judgment, that entering into the Engagement Documents at this time is necessary to obtain the agreement of the Engagement Parties to engage in the arrangement and, as applicable, syndication process for the Exit Facilities.” The Company concurrently seeks a Court order scheduling an expedited November 6, 2013 hearing to consider the motion.

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