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Researched by Industrial Info Resources (Sugar Land, Texas)--Unless it can find a way to get out of its financial pickle, the self-touted largest underground coal mining company in America appears to be teetering on the edge of default. Murray Energy Corporation (St. Clairsville, Ohio) said last week it had entered into forbearance agreements with lenders holding more than 50% of the miner's outstanding loans. However, those agreements only last through October 14.
Industrial Info is tracking 20 Murray Energy mining plants in the U.S. and three planned capital projects worth $60 million.
Industrial Info is tracking $667 million in U.S. coal mining industry projects that are currently under construction.
Click on the image at right for a graph showing under-construction project activity by state.
Murray Energy had elected not to make amortization and interest payments due on September 30 as allowed under its credit and guaranty agreement, the company said in an October 2 press statement.
"Under the terms of the forbearance agreements, the lenders have agreed to forbear from exercising any and all remedies available to them in respect of any event of default arising from the missed amortization and interest payments due on September 30, 2019. The forbearance period extends through 11:59 p.m. (New York time) on October 14, 2019, unless extended, and will terminate upon the earlier of the end of the forbearance period or the occurrence of a specified forbearance termination event."
The agreements "are expected to allow Murray Energy to continue discussions with its lenders about various strategic options to strengthen the company's business, improve its liquidity position, deleverage its balance sheet, and achieve a more sustainable capital structure that supports the company's long-term business plan and results in long-term value generation for the benefit of its employees, customers, vendors and other key stakeholders," the company continued.
According to its website, Murray Energy Corporation and its subsidiaries operate 17 active coal mines, consisting of 12 underground longwall mining systems and 42 continuous mining units in Alabama, Illinois, Kentucky, Ohio, Utah, and West Virginia. It also operates two surface mines in Colombia. The company says it holds about three billion salable tons of coal reserves.
In February, the company said it would idle its KenAmerican Resources, Incorporated, Paradise 9 Mine due to market conditions. The mine had supplied coal to the Tennessee Valley Authority's (TVA) 971-megawatt (MW) Paradise 9 Plant Unit 3, but the TVA's board of directors had voted to retire the unit by the end of 2020.
Industrial Info is tracking two planned vent shaft additions at Foresight Energy's (a subsidiary of Murray Energy) Sugar Camp Energy Complex near Macedonia, Illinois. At the MC#1 underground coal mine, plans are to construct a 16-20-foot-diameter ventilation bleeder shaft to improve underground ventilation and extend the life of the 5 million-7.5 million-ton-per-year longwall mine. Similar plans are in place for a vent shaft addition at the Viking underground coal mine at the Sugar Camp Complex. For more information, see Industrial Info's reports for the MC#1 project and the Viking project.
Murray Energy isn't the only U.S. coal miner facing hard times. Coal's share of the U.S. electricity generation mix was 48% in 2008 and fell to 28% in 2018, as renewables and natural gas have made strong gains in the power market, according to the U.S. Energy Information Administration (EIA). The EIA expects coal's share of power generation to be 24% in both 2019 and 2020. Coal production in the western U.S. is expected to fall by 12% in 2019. For related information, see September 9, 2019, article - Coal and Coal-Fired Generation: From Bad to Worse.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
Industrial Info is tracking 20 Murray Energy mining plants in the U.S. and three planned capital projects worth $60 million.
Industrial Info is tracking $667 million in U.S. coal mining industry projects that are currently under construction.
Murray Energy had elected not to make amortization and interest payments due on September 30 as allowed under its credit and guaranty agreement, the company said in an October 2 press statement.
"Under the terms of the forbearance agreements, the lenders have agreed to forbear from exercising any and all remedies available to them in respect of any event of default arising from the missed amortization and interest payments due on September 30, 2019. The forbearance period extends through 11:59 p.m. (New York time) on October 14, 2019, unless extended, and will terminate upon the earlier of the end of the forbearance period or the occurrence of a specified forbearance termination event."
The agreements "are expected to allow Murray Energy to continue discussions with its lenders about various strategic options to strengthen the company's business, improve its liquidity position, deleverage its balance sheet, and achieve a more sustainable capital structure that supports the company's long-term business plan and results in long-term value generation for the benefit of its employees, customers, vendors and other key stakeholders," the company continued.
According to its website, Murray Energy Corporation and its subsidiaries operate 17 active coal mines, consisting of 12 underground longwall mining systems and 42 continuous mining units in Alabama, Illinois, Kentucky, Ohio, Utah, and West Virginia. It also operates two surface mines in Colombia. The company says it holds about three billion salable tons of coal reserves.
In February, the company said it would idle its KenAmerican Resources, Incorporated, Paradise 9 Mine due to market conditions. The mine had supplied coal to the Tennessee Valley Authority's (TVA) 971-megawatt (MW) Paradise 9 Plant Unit 3, but the TVA's board of directors had voted to retire the unit by the end of 2020.
Industrial Info is tracking two planned vent shaft additions at Foresight Energy's (a subsidiary of Murray Energy) Sugar Camp Energy Complex near Macedonia, Illinois. At the MC#1 underground coal mine, plans are to construct a 16-20-foot-diameter ventilation bleeder shaft to improve underground ventilation and extend the life of the 5 million-7.5 million-ton-per-year longwall mine. Similar plans are in place for a vent shaft addition at the Viking underground coal mine at the Sugar Camp Complex. For more information, see Industrial Info's reports for the MC#1 project and the Viking project.
Murray Energy isn't the only U.S. coal miner facing hard times. Coal's share of the U.S. electricity generation mix was 48% in 2008 and fell to 28% in 2018, as renewables and natural gas have made strong gains in the power market, according to the U.S. Energy Information Administration (EIA). The EIA expects coal's share of power generation to be 24% in both 2019 and 2020. Coal production in the western U.S. is expected to fall by 12% in 2019. For related information, see September 9, 2019, article - Coal and Coal-Fired Generation: From Bad to Worse.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
