Arch Coal on Feb. 9 asked its bankruptcy court for permission to hire PJT Partners LP (PJTP) as its investment banker, with that company having provided those services to Arch prior to its Jan. 11 bankruptcy petition.
St. Louis-based Arch Coal, one of the nation’s largest coal producers, filed its case at the U.S. Bankruptcy Court for the Eastern District of Missouri. The petition to hire PJTP is due to be heard at a Feb. 23 court hearing along with other motions filed lately by Arch.
PJTP is an independent financial advisory firm, listed on the New York Stock Exchange (ticker symbol: PJT). “The Advisor’s restructuring and reorganization advisory operation is one of the world’s leading advisory services providers to companies and creditors in restructurings and bankruptcies,” Arch noted. PJTP’s restructuring group has approximately 60 employees globally. The members and senior executives of the Advisor’s restructuring and reorganization practice have assisted and advised numerous chapter 11 debtors in the development of plans of reorganization and are experienced in analyzing restructuring and related chapter 11 issues. Cases they have handled include ones for power producers Dynegy Inc., Edison Mission Energy, Enron Corp., and Mirant Corp., and also Patriot Coal.
“Since February 4, 2015, the Advisor was retained by the Debtors on a prepetition basis to advise on the Debtors’ capital raising options and restructuring and reorganization efforts. During this time, the Advisor has become intimately familiar with the Debtors’ businesses, affairs, assets and contractual arrangements,” said Arch. “The Advisor has worked closely with the Debtors to analyze the Debtors’ financial positions and to assist the Debtors in evaluating various restructuring alternatives, including raising new capital.
“If this Application is approved, several of the Advisor’s professionals, all with substantial expertise in the areas discussed above, will continue to provide services to the Debtors. Such personnel, including Timothy Coleman, Mark Buschmann and Scott Mates, will lead the team of the Advisor’s professionals and will work closely with the Debtors’ management and other professionals throughout the reorganization process.”
The services to be rendered under this contract include:
- Assist in the evaluation of the debtors’ businesses and prospects;
- Assist in the development of the debtors’ long-term business plan and related financial projections;
- Assist in the development of financial data and presentations to the debtors’ Boards of Directors, various creditors and other third parties;
- Analyze the debtors’ financial liquidity and evaluate alternatives to improve such liquidity;
- Analyze various restructuring scenarios and the potential impact of these scenarios on the recoveries of those stakeholders impacted by the restructuring;
- Assist the debtors in arranging a financing if requested by the debtors, including, but not limited to, debtor-in-possession financing and exit from bankruptcy financing;
- Provide strategic advice with regard to restructuring or refinancing the debtors’ obligations;
- Evaluate the debtors’ debt capacity and alternative capital structures;
- Participate in negotiations among the debtors and their creditors, suppliers, lessors and other interested parties;
- Value securities offered or to be offered by the debtors in connection with a restructuring;
- Advise the debtors and negotiate with lenders with respect to potential waivers or amendments of credit facilities;
- Assist in arranging financing for the debtors, as requested;
- Provide expert witness testimony concerning any of the subjects encompassed by the other investment banking services; and
- Provide such other advisory services as are customarily provided in connection with the analysis and negotiation of a restructuring, as requested and mutually agreed.
Also due to be heard at the Feb. 23 hearing is a Feb. 9 application from Arch to retain FTI Consulting Inc. as its restructuring financial advisor. FTI consists of a worldwide network of 4,400 employees in 26 countries on six continents and has a wealth of experience providing financial advisory services in restructurings and reorganizations.
Arch told the court: “Since September 2015, the Debtors have retained FTI on a prepetition basis to advise on the Debtors’ restructuring efforts. During this time, FTI has become intimately familiar with the Debtors’ financial affairs, business operations, assets, contractual arrangements, capital structure, key stakeholders and other related material information. Likewise, in providing prepetition services to the Debtors, FTI’s professionals have worked closely with the Debtors’ management, board of directors and other advisors. In particular, FTI has worked closely with the Debtors to analyze the Debtors’ financial positions and to assist the Debtors in preparing for a smooth entry into chapter 11. Accordingly, as a result of the prepetition work performed on behalf of the Debtors and the significant knowledge gained thereby, FTI has the necessary background to deal effectively and efficiently with many financial issues and problems that may arise in the context of the Debtors’ chapter 11 cases.
“If this Application is approved, several of FTI’s professionals, all with substantial expertise in the areas discussed above, will continue to provide services to Arch as well as to the other Debtor affiliates. Such personnel, including Alan Boyko and Paul Hansen (collectively the ‘Engagement Leaders’), will lead the team of FTI’s professionals and will work closely with the Debtors’ management and other professionals throughout the chapter 11 process.”