Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  News  >  Economy & Forex

News : Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

Reeling U.S. Coal Industry Sends Two More Producers to Bankruptcy

12/03/2020 | 04:31pm EST

By Jonathan Randles

Falling demand for U.S. coal during the coronavirus pandemic continues to take a heavy financial toll on the industry, tipping two more coal production companies into bankruptcy.

White Stallion Energy LLC and Lighthouse Resources Inc. filed for chapter 11 protection Wednesday and Thursday, respectively, in the U.S. Bankruptcy Court in Wilmington, Del. The companies, which own mines in Illinois, Indiana, Montana and Wyoming, blamed the bankruptcy filings largely on low thermal coal prices and declining coal consumption at U.S. power plants.

The chapter 11 filings are the latest in a string of defaults by American coal companies, highlighting how a downturn in coal markets exacerbated by Covid-19 is straining an industry that was already in decline.

The U.S. power sector consumed 30% less coal in the first half of 2020 than during the same period last year, according to the U.S. Energy Information Administration. The coal industry also has been facing competition from natural gas, a lower-cost fuel alternative, and the continuing retirement of coal-fired power plants.

Evansville, Ind.-based White Stallion said in court papers it is idling its mining operations and had terminated all of its roughly 260 employees just before filing for chapter 11, citing a severe cash crunch. Before filing for bankruptcy, White Stallion obtained a $10 million Covid-19 relief loan through the federal government's Paycheck Protection Program. The company is among hundreds of businesses that have gone into bankruptcy after obtaining a PPP loan.

White Stallion said it intends to rehire up to 24 employees to run the business through bankruptcy and deliver coal to its largest customer, an Indiana affiliate of Duke Energy Corp. White Stallion comes to bankruptcy with about $104 million in long-term debt, according to court documents.

David Beckman, White Stallion's chief operating officer, said the company is planning to sell its assets quickly in chapter 11. The company has lined up bankruptcy financing that includes a January deadline for court approval of the planned sale.

Lighthouse Resources, meanwhile, announced layoffs Thursday at its Decker mine in Big Horn County, Montana, in the coal-rich Powder River Basin. The company said it would continue serving customers while in chapter 11, which "will give it time to consider options for the best path forward."

Lighthouse also owns Millennium Bulk Terminals in Longview, Wash., which has been tied up in legal disputes over Gov. Jay Inslee's efforts to block coal exports out of the state. The company is also the co-owner of a business that operates a coal mine in Sweetwater County, Wyo., that isn't part of the chapter 11 case.

Lighthouse laid off about 76 employees before filing chapter 11, leaving the company with about 91 employees across its business segments at the time of the bankruptcy, according to court documents.

"In light of the challenging market conditions and other impacts on our business from Covid-19, we have been required to reduce costs and reorganize our business, resulting in the reduction of our workforce in Montana," Lighthouse CEO Everett King said. "We are deeply saddened by this impact on individuals, families and communities."

Both Lighthouse and White Stallion Energy have filed customary first-day motions in the bankruptcy court to cover ordinary business expenses as they begin operating in chapter 11.

U.S. Bankruptcy Judge John Dorsey is overseeing the Lighthouse chapter 11, case number 20-13056, and U.S. Bankruptcy Judge Laurie Selber Silverstein is overseeing the White Stallion chapter 11, case number 20-13037.

Write to Jonathan Randles at jonathan.randles@wsj.com

(END) Dow Jones Newswires

12-03-20 1630ET

Stocks mentioned in the article
ChangeLast1st jan.
DUKE ENERGY CORPORATION 0.49% 92.11 Delayed Quote.0.60%
GOLD 0.08% 1838.3 Delayed Quote.-4.61%
SILVER 0.84% 25.215 Delayed Quote.-8.04%
Latest news "Economy & Forex"
08:17aEcb's centeno says eurozone is facing a significant challenge of increasing international role of euro
RE
08:15aKing toppled from throne by gender-neutral card deck
RE
08:15a‘The New American State’ Is Now Available in Kindle Unlimited
SE
08:14aTikTok owner ByteDance launches Douyin Pay, mobile payment service for China
RE
08:11aShares climb, dollar dips before Yellen speech; earnings in focus
RE
08:11aBank of America points to economic recovery as profit beats estimates
RE
08:10aShares climb, dollar dips before Yellen speech; earnings in focus
RE
08:07aODP rejects Staples' takeover offer, proposes alternate plan
RE
08:05a11th Annual RVA Environmental Film Festival to be Presented Virtually, February 12-26, 2021 – Free and Open to the Public
SE
08:01aSOS : Enters into Non-Binding Letter of Intent to Acquire a Cryptocurrency Technology Provider based in Canada
PR
Latest news "Economy & Forex"