Cloud Peak Energy in bankruptcy, inks sale and plan support agreement

By Caroline Salls

Pittsburgh, May 10 – Cloud Peak Energy Inc. filed Chapter 11 bankruptcy Friday in the U.S. Bankruptcy Court for the District of Delaware.

The company said it has entered into an amended and restated sale and plan support agreement with holders of 62% in dollar amount of its secured notes due 2021 and more than 50% in dollar amount of its unsecured notes due 2024.

Cloud Peak said it intends to continue a marketing process for all of its assets. The company expects its mines will continue normal operations throughout the process.

“Over the past several months, Cloud Peak Energy has thoroughly evaluated strategic alternatives to address the challenging market conditions in our industry,” president and chief executive officer Colin Marshall said in the release.

“We believe, at this time, that a sale process in Chapter 11 will provide the best opportunity to maximize value for Cloud Peak Energy.”

In conjunction with the filing, and subject to court approval, Cloud Peak Energy has received a commitment for $35 million in debtor-in-possession financing from some of its pre-bankruptcy secured noteholders.

The company said the DIP financing, combined with cash on hand and funds generated from ongoing operations, is expected to provide sufficient liquidity for Cloud Peak to continue operating during the sale process.

The terms of the financing had not yet been filed as of Friday evening.

According to a news release, the support agreement reflects the support from two of the company’s key creditor constituencies for the sale process, as well as the consent of the 2021 noteholders to Cloud Peak’s use of cash collateral and priming liens to allow for the DIP financing.

The company also filed a number of customary motions with the court seeking approval to support its operations, including to continue payment of employee wages, salaries and benefits without interruption.

Cloud Peak said it intends to pay vendors, suppliers and other providers essential to its business in full for goods and services provided after the filing date and to continue entering into and fulfilling orders under sales contracts with customers in the ordinary course of business.

According to court documents, Cloud Peak had $928.65 million in assets and $634.98 million in debt as of Dec. 31.

The company’s largest unsecured creditors are Wilmington Trust NA of Minneapolis, with a $58.4 million bond claim; BNSF of Fort Worth, Texas, with an $8.12 million transportation claim; and Nelson Brothers Mining Services of Gillette, Wyo., with a $4.26 million trade vendor claim.

Vinson & Elkins LLP is serving as legal adviser, Centerview Partners LLC is serving as investment banker, and FTI Consulting, Inc. is serving as financial adviser to Cloud Peak Energy.

Cloud Peak is a Gillette, Wyo., coal mining company. The Chapter 11 case number is 19-11047.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.