(Casper Star Tribune, July 27) – Alpha Natural Resources emerged from bankruptcy Tuesday, following the approval of a restructuring plan for the coal company on July 6 that was widely considered a victory.
Alpha, which filed for bankruptcy in August 2015, was the first of three large coal companies operating in Wyoming to seek Chapter 11 protection in the last year, when the coal industry faced three-decade lows.
A federal judge approved the firm’s plan to split into two companies, set aside $13 million to fund 4,580 former employees’ health benefits and end self-bonding in its Wyoming mines.
The Alpha deal was partially brokered by the Department of the Interior, which threatened to block the transfer of federal mining leases if the self-bonds were not replaced.
Some hope that Alpha’s story will set a precedent in self-bonding in Wyoming for Arch Coal and Peabody Energy. The bankrupt companies have not had emergence plans approved. Together they have $1.2 billion in self-bonds in Wyoming.
Analysts have questioned the viability of Alpha’s Appalachian company going forward. The newly emerged company will have limited cash flow despite heavy reclamation obligations.
The same is not being said of Contura, which despite a projection of tight liquidity in the next few years inherits the best of Alpha’s assets and the least of its cleanup obligations.