Murray Energy, U.S.’ largest private coal company, looks at possibility of liquidation FacebookTwitterLinkedInEmailPrint分享S&P Global Market Intelligence ($):Murray Energy Corp. is running low on cash and asked a federal bankruptcy court to suspend the company’s obligations to pay for retiree medical obligations, costing the company $256,000 per day.The largest private coal mining company in the U.S. said in a March 30 filing with the U.S. Bankruptcy Court for the Southern District of Ohio that it has just $6 million in cash on hand. Deteriorating coal markets, a global economic crisis and the cost of its bankruptcy reorganization have apparently “wreaked havoc” on the company’s finances.“The bottom line is that if [Murray Energy does] not cut off these obligations in the near term, they will likely exhaust liquidity during these cases — leaving no business to restructure and no go-forward employment opportunities for thousands,” the company wrote.Without canceling certain miner healthcare obligations, Murray Energy said it could be “faced with no choice but to begin a value-destructive enterprise-wide liquidation.” In an attached declaration, Murray Energy President, CFO and CEO Robert Moore pointed to several factors that are pressuring the company’s finances, including excess coal supply in the U.S., a transition to renewable energy resources, low natural gas prices, a warm winter, and an unexpected and rapid market impact from the coronavirus pandemic.“Unfortunately, [Murray Energy] and the coal industry generally expect these trends to continue for the foreseeable future,” Moore wrote. “The negative market trends have been compounded by power price sharing adjustments with certain customers and customer stockpiles that are already at full or near full levels. At this time, the debtors are employing alternate work schedules to preserve liquidity, with certain operations being idled for as many as five days per week.”Murray Energy’s liquidity cushion is deteriorating rapidly. The company had $300 million of liquidity at the end of December 2019 but burned through $180 million in only two months. The company’s current cash flow forecast, which it said has risks to the downside due to sales shortfalls and market uncertainty, anticipates overall liquidity will drop to $30 million by the end of June. Murray Energy warned that the amount is “insufficient to responsibly manage the business in this (or any) environment.”[Taylor Kuykendall]More ($): Strapped for cash, Murray Energy seeks court relief as coal market rapidly fades
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