NEW YORK Patriot Coal Corp. is calling on its lenders to relax its $802 million credit agreement so it can avoid a default as it attempts to exit Chapter 11 bankruptcy.
On Aug. 7, Patriot asked the U.S. Bankruptcy Court in Missouri for an amendment to its agreement with debtor-in-possession lenders Citicorp North America Inc., Barclays Bank Plc and Bank of America Corp. to relax financial covenants to ensure its lenders do not stop funding the remainder of the companys bankruptcy case.
A hearing on the amendment is scheduled for Aug. 20.
The St. Louis-based company has had to contend with a decline in demand and lower prices for metallurgical coal, which have lowered its earnings forecasts.
Patriot Coal filed for Chapter 11 bankruptcy protection in July 2012 in U.S. Bankruptcy Court in New York (amm.com, July 10, 2012).
However, the case was moved to Missouri after a federal bankruptcy court judge in New York received hundreds of letters from coal miners and their families who wanted the case heard in St. Louis so workers and retirees could attend the hearings (amm.com, Nov. 29).
Patriot Coal president and chief executive officer Bennett Hatfield is hoping to get the company out of bankruptcy by the end of the year.
A version of this article was first published in AMM sister publication Steel First.