Fri, January 26, 2018 8:14 am

The private coal producer Murray Energy reported through PR Newswire that it has entered a binding agreement with Armstrong Energy and certain of its senior secured noteholders in which Murray will acquire a 51% ownership stake in a new entity that will own certain assets formerly owned by Armstrong Energy. The secured noteholders of Armstrong will hold the remaining 49% in the new entity. The transaction remains subject to approval by the United States Bankruptcy Court for the Eastern District of Missouri, which is administering Armstrong Energy‘s chapter 11 bankruptcy case. The transaction would be implemented as part of Armstrong Energy‘s proposed plan of reorganization, which has the support of the Company’s secured noteholders and its Official Committee of Unsecured Creditors. Additionally, according to the court docket, today Armstrong also filed a motion to extend the exclusivity period for filing a Chapter 11 plan to June 29, 2018, as well as extend the period to accept/reject a plan to August 28, 2018.

  • Assets:  The new company will consist of 3 surface mines, 2 operating underground mines, 3 existing prep plants and a river dock and rail loadout facility. Murray Kentucky will manage the mines along with the prep and shipping facilities once the deal is closed. These assets will compliment Murray’s existing ILB Paradise #9 (1.52 mm tons in 2017) and will continue to produce low-chlorine, high-sulfur thermal coal. Armstrong’s Ohio County mines produced 4.0 mm tons in 2017, down from 4.73 mm tons in 2016.
  • DTC Read: This caught us a bit flat footed as Armstrong announced on November 1, 2017 that it would allow its assets to be transferred to “a new entity to be jointly owned by Knight Hawk Holdings and the Company’s secured noteholders.” It now appears the Armstrong secured noteholders will partner with Murray Energy and not Knight Hawk.