Murray Energy, largest US producer, joins long list of bankrupt coal companies

Dive Brief:

Murray Energy, the largest underground coal mining company in the United States, filed for Chapter 11 bankruptcy Monday morning, despite the Trump administration's vow to save the coal sector.
Murray is the eighth coal company to file for bankruptcy in the last year, according to The Wall Street Journal. In a statement, Murray said the company intends to finance its operations throughout bankruptcy with cash on hand and access to a $350 million new money debtor-in-possession (DIP) financing facility.
Company founder Robert Murray stepped down from the company's helm, and Robert Moore has been named president and CEO.

Dive Insight:

Murray's bankruptcy did not come as a surprise, merely another sign of the declining coal sector. But despite lagging fundamentals, company officials maintained optimism.

“We appreciate the support of our lenders for this process, many of whom have been invested with the company for a long time," Moore said in a statement. "I am confident the DIP facility provides the company with adequate liquidity to get payments to our valued trade partners and continue operating in the normal course of business without any anticipated impact to production levels.”

Murray added that "although a bankruptcy filing is not an easy decision, it became necessary to access liquidity."

The company's agreement is with an ad hoc lender group holding more than 60% of the approximately $1.7 billion in claims against the company under a "Superpriority Credit and Guaranty Agreement." The company said petitions for bankruptcy have also been filed for all of its main operating subsidiaries, including American Energy Corp. and more than a half dozen others.

The company said it has already filed first day motions with the bankruptcy court to enable day-to-day operations to continue uninterrupted.

Coal's stark decline has come as the price of both renewable energy and natural gas have declined, and battery storage is becoming cheaper. According to the U.S. Energy Information Administration, from 2010 to the first quarter of 2019, more than 546 coal-fired power units retired, totaling about 102 GW.

Plant owners intend to retire another 17 GW of coal-fired capacity by 2025, according to the EIA.

Robert Murray lobbied the Trump administration in 2018 to provide financial support for economically troubled plants, but the White House declined to support the proposal.