Alpha Natural Resources filed on May 20 at its bankruptcy court a series of financial projections for two entities that the company plans to split itself into and a “liquidation analysis” that looks at how its assets would fare under a Chapter 7 liquidation of company assets.
Alpha, a top U.S. coal producer, is currently in Chapter 11 protection at the U.S. Bankruptcy Court for the Eastern District of Virginia.
In part, Alpha wants to reorganize part of itself under a group of companies called the “Reorganized Debtors.” which will retain a total of 14 mining complexes. The retained complexes, and the active mines associated with them, are (additional inactive mines are associated with each complex, but are not mentioned):
- Kingston Complex – Glen Alum and Douglas
- Delbarton Complex – Kielty Mine
- Litwar Complex – Horse Creek #1 and Lower War Eagle
- Kepler Complex – Wyoming #2 and Guyandotte Energy
- Marfork Complex – Pax Surface Mine, Pax High Wall Mine, Workman Creek Surface, Workman Creek High Wall Mine, Horse Creek Eagle Mine, Ellis Eagle Mine, Slip Ridge Mine and Allen Powellton
- Inman Admiral Complex – Black Castle Surface, High Wall Mine #1 and High Wall Mine #2
- Mammoth Complex – Empire Surface Mine, Republic Surface Mine, Republic High Wall Mine, Slabcamp Stockton Mine
- Bandmill Complex – Hernshaw Mine, Cedar Grove No. 2. Highlands Surface Mine, Highlands High Wall Mine and Alma Mine
- Sidney Complex – Process Energy
- Roxana Complex – EMC #9
- Elk Run Complex – No active mines
- Erbacon Complex – No active mines
- Goals Complex – No active mines
- Rockspring Complex – No active mines
The debtors prepared a Business Plan for these operations through a detailed “bottom-up” methodology. As a first step, they prepared forecast income statements for each mine. Next, the debtors combined the mine-level forecast income statements to create forecast income statements for each of the Retained Complexes. Thereafter, the complex-level statements were combined to create consolidated financial statements for the Reorganized Debtors.
Then there is an entity called “Newco,” which would potentially be bought by Alpha creditors under a “stalking horse” asset purchase agreement and would include the company’s largest mines, including the Belle Ayr and Eagle Buttle surface mines in the Powder River Basin of Wyoming. NewCo will acquire a total of five mining complexes (collectively called the “NewCo Complexes”). The NewCo Complexes, and the active mines associated with them, are (additional inactive mines are associated with select complexes, but are not disclosed):
- Cumberland Complex (two longwall mines in the Pittsburgh coal seam in southwest Pennsylvania) – Cumberland Mine and Emerald Mine
- Alpha Coal West Complex – Belle Ayr Mine and Eagle Butte Mine
- Nicholas Complex – Jerry Fork Eagle
- Toms Creek Complex – Cabin Ridge Surface Mine, Cabin Ridge High Wall Mine, Deep Mine #26 and 88 Strip Mine
- McClure Complex – 88 Strip HWM and Deep Mine #41