BECKLEY, W.Va. — Arch Coal Inc. exited chapter 11 Wednesday after a bankruptcy court allowed the coal producer to erase approximately $5 billion in debt.
The bankruptcy restructuring plan is designed to allow the St. Louis-based company to succeed in the energy market.
The new company has not excited Wall Street investors. During midday trading Thursday, Arch’s stock was selling at $61.55 per share, down from a 52-week high Wednesday when it hit $70 a share when news broke it emerged from chapter 11.
The plan, according to court papers cited by The Wall Street Journal, includes a settlement for minor creditors and reduces Arch’s debt load by about $4.7 billion, which allows the emerging Arch Coal to be a “lean, mean, fighting machine for the coming era, which will remain challenging and complicated for the U.S. coal industry,” Arch bankruptcy lawyer Marshall Huebner said.
Unsecured creditors, which include bondholders, will receive $30 million in cash and 6 percent of the new shares, according to court papers. Bondholders also get to choose between warrants to buy up to 12 percent of Arch’s new common shares or $25 million in additional cash.