Patriot Coal said Nov. 6 that the U.S. Bankruptcy Court for the Eastern District of Missouri has confirmed that the company’s disclosure statement contains the information necessary to enable creditors to vote on the company’s plan of reorganization.
Following this Nov. 6 ruling, Patriot will immediately commence the process to solicit votes on its reorganization plan as outlined in filings with the bankruptcy court.
The court on Nov. 6 authorized Patriot to move forward with the proposed rights offerings in conjunction with the plan of reorganization. As previously announced, the rights offerings will be fully backstopped by Knighthead Capital Management LLC and certain affiliates.
Additionally, the court approved an agreement with leading financial institutions Barclays and Deutsche Bank to arrange new exit financing and post-emergence credit facilities of $576m.
Finally, the court approved Patriot Coal’s previously announced settlements with fellow coal producers Peabody Energy and Arch Coal, which had formerly owned some of the Patriot coal mining operations.
“Today’s actions by the court represent important milestones on Patriot’s path to emergence as a strong, well-capitalized competitor in the coal industry,” said Patriot President and CEO Bennett Hatfield. “Taken together, the Rights Offering and the settlements with Peabody and Arch lay the foundation for completion of our exit financing in the next few weeks. We remain on schedule for emergence from bankruptcy in mid to late December.”
Patriot Coal, which has been in Chapter 11 protection since July 2012, is a producer and marketer of coal in the eastern U.S., with 10 active mining complexes in Appalachia (northern and southern West Virginia) and the Illinois Basin (western Kentucky).