Murray Energy working with investment banks on debt relief -sources
By Jessica DiNapoli
July 18 (Reuters) – Murray Energy Corp, one of the largest privately held U.S. coal miners, is working with investment banks to renegotiate terms of its credit agreements in a bid to stave off bankruptcy, people familiar with the talks said on Monday.
The talks underscore the industry’s challenges as governments have curbed the use of coal at power plants, and natural gas and other fuels have become cheaper. Some of the largest U.S. coal companies, including Peabody Energy Corp, Alpha Natural Resources Inc and Arch Coal Inc have already filed for bankruptcy.
Murray Energy, based in St. Clairsville, Ohio, is working with Goldman Sachs Group Inc and Deutsche Bank AG on negotiating relief from creditors, said the people, who asked not to be named because the deliberations are confidential.
Murray Energy, which has about $3 billion of debt, is urging lenders to loosen a rule in their credit agreements concerning the amount of debt the company owes as a function of its profits, the people said.
Covenants under some of the agreements became more restrictive in the third quarter this year, Standard & Poor’s Ratings Services said in an April research note.
Murray Energy, Goldman Sachs and Deutsche Bank declined to comment.
The company, which has about 5,300 employees, has filed lawsuits challenging regulations meant to fight climate change by limiting greenhouse gases and targeting coal-fired power plants.
Murray issued $1.3 billion in bonds last year to help finance its acquisition of a stake in ForesightEnergy LP, a coal miner based in Missouri. Foresight is working on an out-of-court debt restructuring deal, according to a regulatory filing in May.
Murray, in an interview last week on local TV station WTRF-TV Channel 7, said the company was working with its lenders, and that getting relief from them is one step the company must take to avert bankruptcy.
(Reporting by Jessica DiNapoli in New York; Additional reporting by Kristen Haunss in New York; Editing by Richard Chang)