BANKRUPTCY PLAYS

[sludgehound]

FELP gets more time Chpt 11

Coal company Foresight Energy LP (FELP) has received more time to negotiate with debt holders after warning last week that it may need to file for chapter 11 bankruptcy protection.
Foresight announced in financial documents that its bondholders and lenders have agreed not to take any action against the company through March 29 as the groups work to strike a debt-restructuring deal. Such talks have been going on since December, when an unfavorable court decision threw $596.7 million of senior bonds into default--and because of cross- default provisions, its bank and other debt as well. Overall, the company has $1.39 billion in debt as of Dec. 31 .
The lenders and bondholders agreed in December to forbear until March 15 . This most recent extension removes that missed deadline and allows negotiations to continue for another week.
Still, the company warned in recent financial statements that if the terms of an out-of-court restructuring deal aren't reached, it could file for chapter 11 bankruptcy to execute a restructuring deal, or creditors could force it into an involuntary bankruptcy proceeding.
Foresight's financials have been suffering as a result of a long sinking coal market. However, its troubles became immediate when a Delaware Chancery Court ruled on Dec. 4 that a sale agreement between Foresight and parent company Murray Energy constituted a change of control that required the company to make a purchase offer to bondholders.
Recently, Foresight has also been dealing with an ongoing "combustion event" at its Hillsboro Deer Run Mine in Illinois . At the start of the month, the company said it hasn't been able to fully extinguish the fire in its underground mine and has asked the U.S. Mine Safety and Health Administration to temporarily seal the mine. The company said at the time that it's not sure when it will be able to reopen the facility. In February, it laid off 84 workers.
Hillsboro is Foresight's second largest mine, with 867.4 million of tons of proven reserves. In 2014, production at that mine was 5.6 million tons but that number fell dramatically in 2015, to 1.9 million tons.
Foresight owns a total of four mines and says it controls over 3 billion tons of proven coal reserves in Illinois , making it the largest reserve holder in the U.S. Most of its reserves are thermal coal, used in power plants and to produce electricity.
For the period ended Dec. 31 , Foresight reported revenue of $241.7 million and $64.4 million in net losses. During the same period of 2014 those figures were $300 million in revenue and $31.1 million in net profit.
(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection. Go to http://dbr.dowjones.com)
Write to Stephanie Gleason at [e-mail]

(END) Dow Jones Newswires
03-23-16 1427ET
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