Alpha’s reorganization plan approved
Alpha Natural Resources’ plan for reorganization, which includes the sale of its Greene County coal operations and other core coal assets, was approved Thursday by U.S. Bankruptcy Court in Richmond, Va.
The plan will become effective upon Alpha’s emergence from Chapter 11 bankruptcy protection, which is expected in late July, Alpha said in a news release issued Thursday afternoon.
“Confirmation of Alpha’s plan represents the final court milestone in a complex, one-year restructuring process,” Kevin Crutchfield, Alpha’s chairman and chief executive officer, said.
“We appreciate the commitment of our workforce, the trust of our customers and the ultimate support of our creditors and broader stakeholders in helping to pave the way for Alpha’s successful emergence as a more streamlined, financially secure company with attractive prospects for the future,” he said.
Under the reorganization plan, Alpha’s will sell its core coal assets to Contura Energy Inc., a new company formed by a group of Alpha’s first lien lenders.
Those assets include Alpha’s Cumberland and Emerald mine properties, coal reserves for its proposed Foundation Mine near Holbrook, two Powder River Basin mine complexes in Wyoming and the Nicholas, McClure and Toms Creek mine complexes in W.Va. and Va.
Alpha, itself, will continue to operate its remaining mines as a privately held company to provide revenue to satisfy the company’s environmental obligations.
Though Alpha earlier received bankruptcy court approve to terminate its contract with the 580 United Mine Workers employees at its Cumberland Mine, it never followed through on that action.
Workers at Cumberland continue to work under the terms of the previous contract, UMW spokesman Phil Smith said. Smith declined to comment on whether the union is now talking with Contura.
“I really can’t tell you anything at this point, you’ll just have to stay tuned,” he said.
The company closed the Emerald Mine in November, after the mine ran out of mineable reserves.
As part of the bankruptcy proceeding, the company also earlier sold all its natural gas assets in Greene County at auction to Vantage Energy for $339.5 million.
Contura Energy will operate as an independent, competitive company and will provide $35 million of credit support for the reorganized Alpha, the news release said.
In addition, Contura agreed to make contributions of up to $100 million during the next 10 years into certain restricted accounts to help fund the ongoing reclamation activities of the reorganized Alpha.
Objection was filed against the reorganization plan by the U.S. Department of Justice and others claiming that if Alpha sold all its best assets to Contura, the reorganized Alpha would not have adequate funding to meet its environmental obligations.
Alpha, which operates more than 50 underground and surface mines filed for bankruptcy in August. The Company submitted its preliminary plan of reorganization in March. Voting on the plan concluded June 29.