James River Coal Co. (Nasdaq: JRCC), a Richmond, Va..-based coal company, plans to continue to explore a sale or complete a restructuring process through its Chapter 11 case. The company filed in the U.S. Bankruptcy Court for the Eastern District of Virginia in Richmond, listing assets and liabilities between $500 million and $1 billion on April 7.
James River produces and markets coal in Central Appalachia and the Midwest U.S., which is primarily sold to steel mills and independent coke producers, to produces coke for steel manufacturing. The company also sells coal to electricity generators, industrial users and steel producers in various countries.
James River, in a bidding procedures motion filed on April 7, suggested a timeline for an auction that requires approval from Judge Kevin Huennekens. The company is asking the court to approve a timeline for a sale: preliminary indications of interest would be submitted by May 22; that the bid deadline would be June 30; an auction would be held July 8; and a sale hearing would be scheduled for July 11.
The company's investment bank, Deutsche Bank Securities Inc., started a process to try to raise debt or capital for a restructuring, or complete a sale, in February. Discussions with some of the parties regarding an M&A transaction are still ongoing.
Despite previous restructuring efforts, including wage and capital expenditure reductions, the company missed a March 15 interest payment due to holders of 3.125 percent convertible senior notes. For 2013, the James River had an estimated net loss of $16.4 million.
James River also blames the macroeconomic climate for its struggles, saying that competition has intensified in the coal industry as the electricity and steel industries decrease coal consumption, in part because of lower prices available for competing fuels, but also because of environmental regulations.
The company will continue to operate during its bankruptcy case with a $110 million debtor-in-possession facility from a syndicate of lenders, with Cantor Fitzgerald Securities acting as the sole administrative agent and collateral agent.
Perella Weinberg Partners LP is acting as the company's financial adviser.
Marshall Huebner, Brian Resnick and Michelle McGreat from Davis Polk & Wardwell LLP are James River's legal adviser, with Henry Long III, Tyler Brown and Justin Paget of Hunton & Williams LLP serving as debtor co-counsel.
For continuing coverage of stuggling companies, see Mergers & Acquisitions Distressed Company Watch List and the latest edition of Turnaround Tuesday, "Struggling Zogenix Files Suit in Massachusetts."