James River Coal files for bankruptcy protection
(Reuters) - James River Coal Co JRCC.O filed for Chapter 11 bankruptcy protection after struggling with a steep drop in prices and demand for both thermal and steel-making coal.
James River shares plunged 41 percent to 42 cents in extended trading on Monday.
"The coal markets in the U.S. have changed dramatically during the past several years," Chief Executive Peter Socha said in a statement.
U.S. power companies have switched to cheaper natural gas, depressing thermal coal prices, while weak steel demand and excess supplies have weighed on metallurgical coal.
Coal companies have also been hit by President Barack Obama's push for stricter regulation of greenhouse gas emissions by the Environmental Protection Agency.
U.S. miner Patriot Coal Corp declared bankruptcy in July 2012 and exited the restructuring process in December.
James River and its units filed voluntary petitions for reorganization under Chapter 11 in the bankruptcy court for the Eastern District of Virginia Richmond.
The company also said it would enter into a $110 million debtor-in-possession financing facility with several large financial funds.
James River, which expects to continue its mining operations and customer shipments through the restructuring process, said it would use the new funding to support its business on approval by the bankruptcy court.
The company also said it would continue to evaluate potential alternatives such as a capital investment through a plan of reorganization or a sale of one or more parts.
James River shares, which traded above $60 in June 2008, closed at 71 cents on the Nasdaq.
(Reporting by Swetha Gopinath in Bangalore; Editing by Sriraj Kalluvila)