Murray Energy updates operating, financial projections for MMCH unit

By Caroline Salls

Pittsburgh, Dec. 9 – Murray Energy Corp. released information Monday related to an update of operating and financial projections for Murray Metallurgical Coal Holdings LLC (MMCH), according to a news release.

Murray Energy said it held confidential discussions with some members of an informal group of super-priority lenders regarding MMCH, beginning on Dec. 2.

According to the information released Monday, the updated projections reflect current forward seaborne coal prices, updated views on coal sales and updated operating metrics reflecting performance of MMCH’s operations since acquisition.

Based on current market prices, Murray said it has identified a need for roughly $20 million of incremental liquidity through mid-February 2020, including $10.5 million through the end of the year and $9.5 million from the end of the year to mid-February.

In addition, the company said limited incremental liquidity will be required through year-end 2020, before operations move to more productive and lower cost areas of the mine in 2021.

The new capital injection will facilitate ongoing operations and preserve significant equity optionality to a recovery in seaborne coal pricing, the information said.

The company said MMCH’s adjusted EBITDA is projected to be negative $643,000 for December, $1.55 million for January, $1.93 million for February, $4.74 million for March, $3.71 million for April, negative $1.68 million for May, negative $1.76 million for June 2020, $2.04 million for July 2020, $4.9 million for August 2020, $3.76 million for September 2020, $4.32 million for October 2020, negative $279,000 for November 2020 and $1.09 million in December 2020.

Meanwhile, total revenue for December is forecast to be $34.55 million, as well as $20.34 million for each of January and February, $23.3 million for March, $21.83 million for April, $14.02 million for May, $12.39 million for June 2020, $17.93 million for July 2020, $21.85 million for August 2020, $20.35 million for September 2020, $21.58 million for October 2020, $14.93 million for November 2020 and $16.85 million for December 2020.

Adjusted EBITDA for 2021 is expected to be $74.68 million, and expected to be $7.28 million for 2022, $67.81 million for 2023, $38.98 million for 2024, $36.91 million for 2025, $43.58 million for 2026, $75.82 million for 2027 and $40 million for 2028.

Revenue is projected to be $260.08 million in 2021, $206.95 million in 2022, $246.36 million in 2023, $205.48 million in 2024, $201.72 million in 2025, $194.93 million in 2026, $227.9 million in 2027 and $192.49 million in 2028.

Murray said significant capital expenditures will be delayed or eliminated in 2019 because of market reductions and liquidity constraints, taking those expenditures to $9 million from $26 million projected in October.

As of Nov. 23, the company had $292 million in total debt, including $267 million in secured debt and $25 million related to an 8% unsecured note to the Robert E. Murray Trust, which matures on April 30, 2024.

Murray Energy is a Saint Clairsville, Ohio, coal company. The company filed bankruptcy on Oct. 29 in the U.S. Bankruptcy Court for the Southern District of Ohio under Chapter 11 case number 19-56885.

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