Alpha Natural Resources, Inc. filed for Chapter 11 Bankruptcy protection on Monday, August 3, 2015, in the United States Bankruptcy Court for the Eastern District of Virginia in an attempt to escape from $3.3 billion in debt accumulated over the past several years.
Alpha, based in Bristol, Virginia, was founded in 2002 and quickly grew into one of the biggest companies in the sector that produces and sells coal to power generators, steelmakers, and industrial companies. Currently the company operates about 60 coal mines throughout Virginia, West Virginia, Pennsylvania, Kentucky, and Wyoming. Alpha has approximately 8,800 employees, according to its website, though it has announced the elimination of more than 800 jobs this year.
Alpha has become the fourth major U.S. coal company, among Patriot Coal Corp., Walter Energy Inc. and James River Coal Co., to seek bankruptcy protection in the last 15 months. Coal production has been plunging in the United States in recent years as many utilities are switching to natural gas, which gives power producers a cheaper, less-polluting alternative. In addition to this, many in the electric power sector are increasingly turning to renewable energy sources like wind and solar power as clean-air concerns become more pressing.
“The change and challenges the U.S. coal industry has experienced over the last several years are greater than any in the past three decades,” said Alpha’s chairman and chief executive officer, Kevin Crutchfield, in a press release. “There is no doubt more uncertainty ahead, but also transformational opportunity in the coal sector for those who make proactive, strategic decisions.” Alpha has secured a debtor-in-possession financing package of up to about $692 million that will help it to reorganize. Crutchfield expects the restructuring process to last more than a year, but is seeking protection from creditors so that normal business operations can be allowed to continue uninterrupted.