Walter Energy Canada commences ‘Sale & Investment Solicitation’ Process

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VANCOUVER, B.C. — After announcing early last month that it had put its Canadian subsidiary on the auction block, Walter Energy has now confirmed it has received approval from the B.C. Supreme Court to commerce a sale and investment solicitation process for the assets of Walter Energy Canada.

It has engaged PJT Partners as a financial advisor and it is soliciting offers to purchase some or all of the aforementioned assets, or make an investment in the company by 5 p.m. Eastern Time on Mar. 18, 2016, with the Stay Period extended up to Apr. 5, 2016.

Walter Energy Canada and a number of its’ affiliates and partnerships obtained creditor protection under the Companies’ Creditors Arrangement Act in accordance with the Initial Order granted on Dec. 7, 2015.

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Canadian operations of Walter Energy Canada consist primarily of three coal mines and properties in the BC Peace—the Brule, Wolverine, and Willow Creek open-pit metallurgical mines, in the Tumbler Ridge and Chetwynd areas.

However, Walter Energy also owns one coal mine in South Wales through its Walter United Kingdom subsidiary, and all four mines are now idled as a result of current market conditions.

In its filing with the CCAA, Walter Canada said it had on hand approximately $40.6 million U.S. — which, among other things, would be used to maintain its idled operations under its existing care and maintenance program.

However, it also warned it could be depleted considerably in the near term, since the company has no sources of operating revenue and insufficient funds to restart the mines in light of several liabilities.

A leading metallurgical coal producer for the global steel industry, Birmingham, Alabama based Walter Energy, and its U-S subsidiaries filed for relief under chapter 11 of the U.S. Bankruptcy Code, on Jul. 15, 2015. 

There, it was said to be facing more than $3 billion in debt, either due, or coming due, by 2021. But, it should be noted again Walter Energy Canada and Walter United Kingdom, were not part of the U.S. filing and are not included in an asset purchase agreement entered into by Walter Energy last November.

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