Photo by: Duane Daws
TORONTO (miningweekly.com) – Bankrupt coal company Walter Energy has agreed to sell its Alabama assets to a new company formed by its senior lenders.
Under the terms of the asset purchase agreement, Walter would receive $5.4-million in cash. The agreement also contemplated a $1.25-billion credit bid of existing indebtedness and the assumption of certain liabilities by the third party.
Walter had filed the agreement with the Bankruptcy Court for the Northern District of Alabama, as part of the court-supervised auction process under the Bankruptcy Code. Therefore, the purchase agreement was subject to higher, or better offers, besides other conditions.
The company advised that an asset sale was one of the possible means of achieving the restructuring it sought when it filed for Chapter 11 protection in July.
Walter expected the sale of its Alabama assets to speed the restructuring process along what it believed to be the best path forward in a highly challenging industry environment.
Walter Energy's non-US operations, including those in Canada and the UK, were not included in the bankruptcy proceedings.