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Walter Energy files for bankruptcy

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World Coal,

Walter Energy has become the latest US coal company to file for bankruptcy protection, the company said in a statement, after it entered into an agreement with creditors on a restructuring.

“To implement this pre-negotiated restructuring, Walter Energy and its US subsidiaries have filed for relief under chapter 11 of the US Bankruptcy Code,” the company said.

The company’s non-US operations, including those in Canada and the UK, are not included in the filings.

“This restructuring plan provides a roadmap for Walter Energy to establish a sustainable capital structure, make further changes to operational cost drivers and ensure that the company can continue to operate safely and competitively in the years ahead,” said Walt Scheller, Walter’s CEO.

Under the terms of the proposed restructuring, the companies senior lenders would convert their debt into an equity stake in the company.

“With the support of our key senior lenders, we will use this process t pursue the best possible outcome on behalf of all of our stakeholders, including our employees and our communitites,” concluded Scheller. “In the face of ongoing depressed market conditions in the market for met coal, we must do what is necessary to adapt to the new reality of our situation.”

Walter Energy was saddled with debt of over US$3 billion as of 31 March, according to a regulatory filing. The company follows in the footsteps of Patriot Coal, which filed for bankruptcy in May.

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