The restructuring agreement, which must be approved by a judge, includes refinancing an outstanding loan and a “business transformation” meant to significantly increase cash flow, the company statement said, without providing details.
The group of lenders that holds a majority of Westmoreland’s debt also plans to bid for the company’s assets, the statement said. An affiliated company, Westmoreland Resource Partners, is being sold off separately.
Westmoreland was incorporated in 1854 in Pennsylvania. It has coal mines in Montana, Wyoming, New Mexico, Ohio, North Dakota and Texas, and a coal-fired power plant in North Carolina.
Westmoreland also has mines in Canada that are not part of the bankruptcy filing.
In Montana, coal demand involving Westmoreland’s Rosebud mine is expected to drop when two of the four units of the Colstrip power plant cease operations by 2022. The company’s other major Montana mine, the Absaloka mine on the Crow Indian Reservation, has already seen demand drop.
Crow chairman Alvin “A.J.” Not Afraid said the mine provides a significant portion of the tribe’s revenue. But there is less potential for financial harm after Westmoreland renewed a contract earlier this year with an Xcel Energy power plant in Minnesota, which burns coal from the Absaloka mine.
In New Mexico, Westmorland’s San Juan mine also serves a power plant that’s looking to get out of coal use earlier than expected.
In response to the bankruptcy filing, conservation groups renewed calls for Westmoreland to ensure it has enough money in reserve to clean up its mines and pay severance to workers if it ceases operations.
“Nothing can stop America’s shift away from coal and toward clean energy, but the transition should be managed to ensure workers are treated with respect and that vital environmental obligations are honoured,” said Mary Anne Hitt of the Sierra Club.
Westmoreland officials have previously said the company is fully bonded to cover future reclamation work at its mines.