(Reuters) - Alpha Natural Resources Inc, one of the largest U.S. coal companies, became the latest in the hard-hit industry to seek bankruptcy on Monday.
The move comes as President Barack Obama is expected to unveil tough new measures to cut greenhouse gas emissions from coal-fired power plants.
Alpha blamed its Chapter 11 bankruptcy on tougher regulatory standards and policies that favor renewable energy, as well tumbling prices for its coal.
Alpha is the world’s third-largest supplier of metallurgical coal used in making steel and has also been hit by a slowdown in China.
Walter Energy Inc and Patriot Coal Corp also filed for bankruptcy protection this year. Energy Future Holdings Corp, a power company that also has a large coal mining business, has been in bankruptcy since 2014.
Alpha Natural, with total liabilities of $7.11 billion, has reported adjusted losses for the past 14 quarters.
The company said on Monday it had secured an 18-month debtor-in-possession financing of about $692 million.
The company has lost nearly all its stock market value, with its pink sheet shares trading at 3.7 cents on Monday. Its unsecured bonds were bid at less than 4 cents on the dollar, according to Reuters data.
The company became the second-largest publicly traded U.S. coal producer when it bought Massey Energy Co in a $7.1 billion deal in 2011, when its stock was trading at more than $50.
Alpha listed Donald Blankenship, the former chief executive of Massey, among its largest unsecured creditors, owed $3.5 million. Alpha was ordered earlier this year to cover legal defense costs for Blankenship, who is defending himself against criminal charges related to a 2010 mine explosion.
“During the past several years, American coal producers have encountered a confluence of macroeconomic headwinds, competitive pressures and regulatory obstacles that, collectively, have distressed the domestic coal industry,” said Alpha’s chief executive officer and chairman, Kevin Crutchfield, in a filing with the U.S. Bankruptcy Court in Richmond, Virginia.
Crutchfield estimated tighter regulations led to 400 coal-fired power plants closing in recent years and he said he expected 468 more to be shut.
Alpha Natural and its affiliates operate more than 50 underground and surface mines, and more than 20 coal preparation facilities in Virginia, Kentucky, West Virginia, Pennsylvania and Wyoming.
It said it employs 8,000 full-time, and about 1,000 are unionized, according to Crutchfield.
Additional Reporting By Manya Venkatesh in Bengaluru; Editing by Don Sebastian and Andrew Hay