By Heather Richards
Via Wyoming News Exchange
CASPER — Cloud Peak Energy gained another week of reprieve Tuesday, when the coal company reached an agreement with creditors to extend a grace period for their unpaid debt until May 7.
In a filing Wednesday with the Securities and Exchange Commission, the coal firm that operates the Antelope and Cordero Rojo mines in Campbell County reiterated its message of recent weeks concerning its consideration of bankruptcy, sale and debt restructuring.
“Although this process remains uncertain and fluid, we will need to restructure our balance sheet in order to improve our capital structure, adjust our business to ongoing depressed Powder River Basin thermal coal industry conditions, address our significantly reduced liquidity and continue as a going concern,” the company wrote.
“A going concern” refers to a viable business.
Cloud Peak Energy chose not to pay a debt installment on March 15 of $1.8 million, taking advantage of a 30-day grace period. The company received a second reprieve from repercussions — which would mean the creditors could demand the entire debt be paid in full due to default — on April 14 until May 1.
That forbearance will continue until May 7.
Cloud Peak is Wyoming’s third-largest coal producer. It also operates a Montana mine, Spring Creek. The company has been increasingly pressured in the last few years as Wyoming’s Powder River Basin coal industry stabilized following a dramatic economic downturn.
Unlike coal giants Peabody Energy and Arch Coal, Cloud Peak did not face bankruptcy and layoffs that characterized the coal downturn in 2015 and 2016. However, the company also missed the debt elimination that benefited those bankrupt firms in the long run.
Coal experts argue that the Powder River Basin is under increasing pressure from the contraction of the coal for power market in the U.S. Cloud Peak and other producers have been forced to adapt to fewer and fewer customers for their product. Wyoming’s largest mines are likely to reduce coal production in 2019 as a result.