Arch gets 30-day extension on interest payment
Arch has "sufficient liquidity to continue normal mining operations and meet its obligations" in the near term, the company said.
But it is exercising the grace period to negotiate with creditors holding its senior notes due in 2019 and 2021
in hopes of developing "a comprehensive plan to restructure its balance sheet" to keep operating in the long term.
The coal producer has been concerned about its cash flow since at least July, when it tried to exchange up to $2.875bn in debt due in 2019-2021 for a smaller amount of new notes due in 2022-23. It abandoned the effort in October after more than half of its lenders withheld their consent for the exchange.
Arch then wrote down the value of $2.1bn in assets during the third quarter, and terminated its $250mn revolving credit facility on 11 November to try to shore up liquidity. But the company would still need to significantly restructure its debt to "continue to operate as a going concern," chief financial officer John Drexler said in November.
Arch is also at risk of being delisted from the New York Stock Exchange (NYSE). The exchange sent a letter last week notifying the coal producer that its market capitalization and equity no longer meet listing standards. It has until next week to tell the NYSE whether it will file a plan to regain compliance.
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