Alpha Natural Resources, Inc., one of the nation’s leading coal companies, filed for Chapter 11 bankruptcy to address over $3 billion in debt.
Alpha Natural Resources, Inc. and a number of its wholly owned subsidiaries filed voluntary petitions with the Eastern District of Virginia US Bankruptcy Court in Richmond yesterday to reorganize under Chapter 11 bankruptcy status. According to PR Newswire, the company’s board of directors authorized the petitions to better position the coal company to deal with rapidly shifting energy markets.
The company will seek relief from the bankruptcy court that would permit normal business operations to continue while Alpha reorganizes its finances. This includes mining coal, honoring customer commitments, and paying wages and benefits to employees. The company operates over 50 underground and surface mines and more than 20 coal processing facilities in Virginia, West Virginia, Wyoming, Kentucky and Pennsylvania.
CEO Kevin Crutchfield acknowledges that filing for Chapter 11 bankruptcy is a difficult decision, but is the right strategy for the company. It will allow the firm to restructure its debt and protect their operations. Crutchfield added that he believed the company would emerge from the process stronger.
The coal industry in the U.S. is facing some tough times, facing increased competition from natural gas and renewable energy. In addition, the White House just announced on Monday the final terms of its “Clean Power Plan,” an initiative that would reduce carbon emissions from coal-fired power plants over the next 15 years by a considerable amount.
The filing may help Alpha Natural Resources, Inc. better handle immediate challenges, but it does little to address the dynamic nature of modern energy markets by relying on coal, one of the oldest fossil fuels to be used on a large scale.