Arch Coal to end self-bonding in Wyoming
OREANDA-NEWS. September 14, 2016. Arch Coal will stop using self-bonds to meet its reclamation obligations in Wyoming once it emerges from Chapter 11 bankruptcy protection.
The coal producer outlined its proposal in an amended reorganization plan filed on 11 September with the federal bankruptcy court for the Eastern District of Missouri. The court is holding a confirmation hearing for the plan today.
Arch said it will replace the bonds with "surety, cash or collateralized financial assistance" within 15 days after it exits court-supervised restructuring. The company's liabilities in Wyoming total about \\$485mn.
State self-bonding programs allow coal companies to leave a portion of their reclamation liabilities uninsured if they meet certain financial criteria. But these programs have come under scrutiny from environmental groups, lawmakers and federal agencies after major coal producers including Arch, Peabody Energy and the former Alpha Natural Resources filed for bankruptcy protection.
The US Office of Surface Mining Reclamation and Enforcement last month issued its first every policy advisory to urge states to stop using self-bonding, and the Interior Department announced plans to adopt stricter federal regulations for such programs.
Alpha and a group of senior lenders that bought its core assets pledged in July to end self-bonding in Wyoming an West Virginia. That cleared a final hurdle in getting the company's restructuring plan approved. It emerged from Chapter 11 at the end of July.
Arch's Chapter 11 exit plan has received "overwhelming support from both secured and unsecured creditors alike," the Official Committee of Unsecured Creditors said in a 12 September filing supporting confirmation of proposed restructuring. The US Trustee Program and a handful of creditors have filed objections that the bankruptcy court judge will consider during the confirmation hearing.