Murray Energy, the US largest privately owned coal producer led by outspoken Donald Trump's ally Robert Murray, has filed for chapter 11 protection, as the fossil fuel's role in the country's energy mix continues to weaken
The Ohio-based miner, the eighth coal company to go under over the past year, said it had reached a restructuring agreement with lenders to restructure more than $2.7 billion of debt.
As part of the arrangement, lenders are creating a new entity called Murray NewCo, which will acquire all assets belonging to Murray Energy - one of the most powerful and well-connected companies in the coal industry.
The coal producer noted it would finance operations with available cash and a $350 million debtor-in-possession financing facility.
Robert Murray, the self-proclaimed king of the coal industry, is stepping down from its chief executive position, but he will remain as the company's chairman. Former chief financial officer, Robert Moore, is taking over, the company said.
"Although a bankruptcy filing is not an easy decision, it became necessary to access liquidity and best position Murray Energy and its affiliates for the future of our employees and customers and our long term success," Robert Murray said in the statement.
Unlike many of its peers, Murray Energy was able to overcome the shrinking demand from utilities by focusing on exports. However, those shipments have shrank because of declining global prices.
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US coal exports are estimated to have dropped to 20.9 million tonnes in the third quarter, according to the country's Energy Information Administration (EIA). That represents a 28 percent fall compared to the same period of 2018.
The EIA expects coal exports to keep their downward trend, slipping to 17.3 million by the end of 2020.
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Internal demand for the fossil fuel, in turn has hit a decades-low, with power plants expected to consume less coal next year than at any point since President Jimmy Carter was in the White House, according to government forecasts released in early October.
Murray Energy's collapse is yet another sign of a dying industry, despite Trump's rescue attempts. Right after taking office, he slashed environmental regulations and even installed former coal lobbyist Scott Pruitt at the head of the Environmental Protection Agency (EPA).
The deregulatory push, however, has been unable to offset market forces. Coal just can't compete with cheap natural gas and the falling cost of solar power, wind and other forms of renewable energy.
Murray, who began working in coal mines at 16 to support his family and founded his own company in 1988, has been an outspoken advocate of coal.
He challenged President Barack Obama's clean-air rules and even called him the "greatest destroyer the US has ever had."
In 2017, Murray filed a defamation lawsuit against John Oliver, HBO and CNN owner Time Warner (now called WarnerMedia), alleging "character assassination" during an episode of "Last Week Tonight." That lawsuit was dismissed last year.
Murray has also been a skeptic of climate change, arguing that any threats have been exaggerated.
By Mining.com
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