Alpha files for Chapter 11 bankruptcy protection

Alpha Natural Resources and some of its wholly owned subsidiaries have filed for Chapter 11 bankruptcy protection, becoming the biggest US coal producer this year to falter under weak market conditions.

The company has secured an 18-month debtor in possession financing package totaling about $692mn which it hopes will enable it to continue business as it goes through the restructuring process. It listed $7.1bn in debt and $10.1bn in assets in its voluntary petition filed with the US Bankruptcy Court for the Eastern District of Virginia early today.

The bankruptcy process "will enable us to build on the significant steps we have taken over the past several years to restructure our debt and protect our operations," chief executive Kevin Crutchfield said.

Alpha has been among the most aggressive US producers in shutting coal mines to try to keep up with weaker US market conditions. But the industry "is in an unprecedented period of distress," it said.

"The change and challenges the US coal industry has experienced over the last several years are greater than any in the past three decades," Crutchfield said. There is more uncertainty ahead, "but also transformational opportunity in the coal sector for those who make proactive, strategic decisions," he said.

Alpha expects to keep its management team in place during the process. The company suspended its second-quarter earnings release and conference call, which was scheduled for 5 August.

cbs/cpc

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