Though struggling coal producer Arch Coal Inc. (NYSE: ACI) is in balance-sheet restructuring talks with creditors, which may result in the struggling coal producer filing for Chapter 11 bankruptcy protection.
Two scenarios could lead the business into bankruptcy: if it reaches a restructuring agreement and seeks Chapter 11 to make the changes; or if it doesn't reach an agreement but deems it necessary to file for bankruptcy to restructure.
"In either case, such a proceeding could be commenced in the near term," the company says in a Nov. 9 filing with the U.S. Securities and Exchange Commission. "If a plan of reorganization is implemented in a bankruptcy proceeding, it is likely that holders of claims and interests with respect to, or rights to acquire our equity securities, would likely be entitled to little or no recovery."
Arch has accumulated almost $2 billion in net losses for the quarter ended Sept. 30, SEC filings show.
Though the company brought in about $689 million in revenue for the third quarter, it doesn't have enough money for debt servicing, according to John Drexler, Arch's CFO.
The coal company says market conditions, including low coal prices, are causing it to struggle.
For the previous edition of Turnaround Tuesday, see American Eagle Turns to Herky Hawk and Other Team Mascots for Comeback in Tough Retail Climate. For a list of struggling companies, see Mergers & Acquisitions' Distressed Company Watch List.