Xinergy Ltd and 25 subsidiaries have filed voluntary petitions under Chapter 11 of the US Bankruptcy Code in the US Bankruptcy Court for the Western District of Virginia, Roanoke Division.
Xinergy has mineral reserves, mining operations and coal properties in the Central Appalachian regions of West Virginia and Virginia. During the reorganisation, the company has said that it will operate its business and continue customer shipments without interruption. Xinergy will also continue to pay its employees in the normal course and has filed a motion with the court seeking to honour its pre-petition employee obligations.
Bernie Mason, Xinergy's CEO, said: "Over the past several years, the coal markets in the US have faced a number of significant challenges, including increased environmental regulations and reductions in demand due to weaknesses in the economy and lower natural gas prices […] Additionally, continued weakness in the market for metallurgical and thermal coal, combined with an extremely cold winter that impacted the mining and shipment of coal, has continued to erode Xinergy's cash position.
"After careful consideration of all available alternatives, Xinergy determined that a Chapter 11 filing was a necessary and prudent step and the best way to obtain the financing necessary to maintain regular operations and allow for a successful restructuring.
"We are optimistic that Xinergy will emerge from our Chapter 11 reorganisation as a stronger, more competitive company that is well positioned for success in the coal industry. We have appreciated the tremendous support of our customers, employees and vendors throughout our history and look forward to continued good relations during this important phase."
Xinergy is also seeking approval to obtain debtor-in-possession financing, which will provide an immediate source of funds once approved by the court.
Edited from press release by Joseph Green
Read the article online at: https://www.worldcoal.com/coal/07042015/xinergy-seeks-financial-and-operational-restructuring-2144/