Alpha Natural Resources Can Most Likely Survive, But Can It Thrive?
Stephen Simpson, CFA • 10 Comments
Stephen Simpson, CFA • 10 Comments
Going Over Alpha Natural Resources
Paulo Santos • 42 Comments
Paulo Santos • 42 Comments
Wed, Jul. 27, 10:41 AM
- Alpha Natural Resources (OTCPK:ANRZQ) says it has emerged from Chapter 11 bankruptcy as a smaller, privately-held company operating 18 mines and eight preparation plants in West Virginia and Kentucky.
- New CEO David Stetson says the restructured company has a solid financial foundation and now is better positioned to meet its clean-up obligations.
- ANR filed for Chapter 11 last August and reached agreement earlier this month where it agreed to provide ~$400M over a decade for cleaning up mining sites and polluted streams in return for approval of its bankruptcy exit plan.
Fri, Jul. 8, 11:55 AM
- The U.S. government agreed yesterday to a mine clean-up deal that allows Alpha Natural Resources (OTCPK:ANRZQ) to exit bankruptcy.
- ANR had $676M in self-bonded mine clean-up costs, mostly in Wyoming and West Virginia, when weak coal prices pushed the company into bankruptcy in August, and the new agreement was meant to assure that the company has the finances to restore its mines to their natural setting and clean up polluted streams.
- The Interior Department says the deal will eliminate self-bonds for ANR’s reclamation obligations and shift toward third-party financial assurance.
Wed, Jul. 6, 6:38 PM
- Alpha Natural Resources (OTCPK:ANRZQ) says it expects to reach a deal with the U.S. government over responsibility for the cost of cleaning up mining sites, removing a major hurdle to the coal company's ability to exit bankruptcy.
- ANR and various government agencies had appeared to be headed for a showdown in court tomorrow, when the company is scheduled to ask a federal judge to approve its restructuring plan over objections.
- ANR says a deal would include a "funding agreement" between the company, its lenders and a new company created to take over ANR's best mining assets.
- ANR, Peabody Energy and Arch Coal have all gone bankrupt in the last 11 months, leaving behind ~$3.6B in self-bonding liabilities.
Tue, Jun. 21, 10:53 AM
- The U.S. Department of Justice says Alpha Natural Resources' (OTCPK:ANRZQ) plan to sell valuable assets to its creditors is "not feasible or viable," as the plan fails to provide for significant mine cleanups and long-term water treatment at mine sites, according to a court filing yesterday.
- The sales are part of ANR's plan to emerge from Chapter 11 bankruptcy protection, which it filed last August, but environmental groups have said the plan would leave the reorganized company with insufficient funds to restore land it has mined.
- The government does not plan to approve the transfer of any federal lease or contract unless cleanups are assured, the DoJ said, adding that the transfer of such leases without government consent is prohibited.
Thu, Jun. 9, 5:42 PM
- Alpha Natural Resources (OTCPK:ANRZQ) reaches an agreement in principle with West Virginia environmental regulators in which the bankrupt coal miner will cover hundreds of millions of dollars of reclamation work at its mines.
- As part of the settlement, West Virginia's Department of Environmental Protection agrees to drop objections to ANR's Chapter 11 plan, which was criticized because it lacked a provision for environmental damage left behind by coal mining operations.
- According to the DEP, the settlement is valued at $309M and subject to bankruptcy court approval.
Wed, May 18, 4:58 PM
- The U.S. is considering whether to reign in the self-bonding subsidy on coal mine cleanup costs and thus shield taxpayers from those liabilities, says the director of the Office of Surface Mining and Reclamation Enforcement.
- Peabody Energy (OTCPK:BTUUQ), Arch Coal (NYSE:ACI) and Alpha Natural Resources (OTCPK:ANRZQ) have gone bankrupt in the last 10 months and left behind ~$3.6B in self-bond liabilities.
- Environmentalists have warned officials that coal-producing states in the west left the self-bonding program open to abuse, and the regulator says it will investigate those concerns.
Tue, May 17, 2:22 PM
- Rice Energy (RICE -0.3%) is modestly lower after after its stalking horse bid to acquire 27,400 net acres in the Marcellus Shale near its core in southwest Pennsylvania was outbid by a Vantage Energy subsidiary that offered to pay nearly $140M more for the assets at auction.
- Vantage won the auction for natural gas assets sold by bankrupt Alpha Natural Resources (OTCPK:ANRZQ) with a cash bid of $339.5M.
- Rice completed a common stock offering last month to help fund the potential deal, raising $312M; the funds now will be used for general corporate purposes, which could include funding a portion of its 2017 capital budget.
- Rice also says its borrowing base was increased to $875M from $750M, and that its year-end 2015 proved reserves rose by 30% Y/Y to 1.7T cfe.
- Now read Rice Energy: Implications of the proposed acquisition
Fri, May 6, 10:37 AM
- The restructuring plan of bankrupt Alpha Natural Resources (OTCPK:ANRZQ) could be held up because consulting firm McKinsey & Co. failed to fully disclose connections with potential buyers of the miner's assets, says agovernment watchdog that polices conflicts in bankruptcy.
- The Office of the U.S. Trustee warns that the lack of full disclosures may "cast a cloud" over Alpha's restructuring strategy.
- The restructuring plan would include a sale of core mining assets to lenders, who would pay by forgiving what they are owed rather than cash; Alpha also plans to sell natural gas assets to an affiliate of Rice Energy for $200M.
Tue, Mar. 29, 5:38 PM
- Alpha Natural Resources (OTCPK:ANRZQ) is asking a bankruptcy judge to let it cut retiree benefits and tear up existing labor agreements with its mine workers union, following in the footsteps of bankrupt coal mining peers Patriot Coal and Walter Energy.
- ANR says cost-cutting negotiations with the United Mine Workers union took place over the past several months but failed to result in a deal, thus it is now asking the U.S. Bankruptcy Court in Richmond to sever its obligations to the union workers and retirees.
- With no sign of recovery in the coal markets, ANR says the continued operations of its remaining assets depend on its ability to cut ~$200M in annual costs, including $60M which it says must come from the union, and that time is running out ahead of a planned May 16 auction of its assets.
Wed, Mar. 9, 10:18 AM
- Bankrupt coal miner Alpha Natural Resources (OTCPK:ANRZQ) says it hopes to exit bankruptcy proceedings by June 30, after filing a Chapter 11 plan of reorganization yesterday with the U.S. Bankruptcy Court.
- The proposal essentially calls for the creation of two companies: one that includes the company’s core assets, including its Wyoming mines, and another made up of marginal properties in Appalachia.
- The restructuring plan does not include an outline for resolving ANR's reclamation liabilities of its mines in Wyoming, where the company maintains $411M in unsecured cleanup costs; an ANR official says the matter must be negotiated by the new company and the state.
Tue, Feb. 23, 3:46 PM
- Coal companies must face the costs of mine cleanup even as they get pushed toward bankruptcy, U.S. Interior Secretary Jewell tells a Senate committee.
- Bankrupt Alpha Natural Resources (OTCPK:ANRZQ) and Arch Coal (NYSE:ACI) have sought to escape cleanup liabilities in bankruptcy court, which Jewell says the will not tolerate.
- Of the ~$2B in future cleanup costs facing Peabody Energy (BTU -1.6%), nearly 75% of the total is self-bonded and has no concrete backing, and investors worry that any call to replace self-bonds with costly surety bonds could push the struggling miner into bankruptcy.
Tue, Feb. 9, 10:13 AM
- Existing lenders have offered $500M for the core assets of Alpha Natural Resources (OTCPK:ANRZQ), in a credit bid designed to get the distressed coal mining operation out of bankruptcy.
- The offer is open to competition, and is linked to a business plan that will lay the groundwork for ANR to emerge from chapter 11 by the end of June, WSJ reports, citing court papers.
- If the sale plan is approved, ANR would hold the door open until March 28 for competing bids on the assets its lenders have identified as central to the reorganization effort.
Dec. 8, 2015, 7:12 PM
- The Obama administration is concerned that the self-bonding coal mine cleanup program could leave taxpayers with multibillion-dollar liabilities, a U.S. Interior Department official says.
- Self-bond liabilities totaling ~$3.6B could fall to taxpayers and righting the program "is a huge priority," the official says, according to Reuters.
- Alpha Natural Resources (OTCPK:ANRZQ) left behind more than $670M in self-bond liabilities when it filed for bankruptcy in August, and the government has not determined how best to protect taxpayers from the hit.
- Relevant tickers: KOL, BTU, ACI, CLD, WLB, CNX
Nov. 11, 2015, 3:56 PM
- Alpha Natural Resources (OTCPK:ANRZQ) is seeking to eliminate health and other non-pension benefits for more than 4,500 non-union retirees and their eligible spouses and dependents, calling the benefits a financial burden representing a ~$125M liability on its balance sheet, it said in a filing in U.S. Bankruptcy Court in Richmond.
- ANR says it believes it has the authority under applicable contract and bankruptcy law to terminate or amend the benefits in the ordinary course of its business, and seeks the court's approval "out of an abundance of caution, in the event that the proposed termination of non-pension retiree benefits is found to be outside the ordinary course of the debtors' business."
Sep. 15, 2015, 3:48 PM
- Alpha Natural Resources (NYSE:ANR) hammers out deals with creditors and representatives of its coal mine workforce in a bid to win court approval of a $692M bankruptcy loan.
- After the bankruptcy loan ANR brought to court today marked a "dramatic change" from an earlier version that drew a volley of criticism, according to a lawyer for the group representing the coal company's unsecured creditors, the bankruptcy judge indicated he will sign off on the Chapter 11 financing deal.
- Burdened with $4B in debt, ANR is trying to revamp its business to survive the slump in coal prices and avoid being pushed to the Chapter 11 auction block.
Aug. 3, 2015, 12:42 PM
- With Alpha Natural Resources (NYSE:ANR) filing for bankruptcy, Fitch Ratings among others thinks Arch Coal (NYSE:ACI) is next, but Cowen analysts believe ACI may escape ANR’s fate.
- The firm cuts its rating on ACI to Market Perform from Outperform with a $0.25 price target but believes investors should not give up on the stock entirely, noting the company has been “proactive in addressing debt levels with a private debt offering, has managed its cash burn, and is pursuing a reverse stock split.”
- ACI is better positioned than ANR or Walter Energy (NYSE:WLT), Cowen says, as its operations were cash margin positive in H1, cash flow is expected to be break even to slightly up for the rest of the year, and a majority of its open Powder River Basin book is skewed towards higher Btu coal which commands better pricing.
- Today, ACI announced an extension of its private debt exchange offer.
Sector: Basic Materials
Industry: Nonmetallic Mineral Mining
Country: United States
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