Westmoreland gets $110 million delayed-draw loan via ad hoc group

By Marisa Wong

Morgantown, W.Va., May 22 – Westmoreland Coal Co. announced it has secured a new financing commitment for a $110 million delayed-draw term loan from an ad hoc group of the company’s existing secured creditors holding about 79% of its term loan and roughly 79% of its senior secured notes.

According to a press release, $90 million is available immediately, and $20 million is available under a delayed draw.

The facility is secured by substantially all of the company’s U.S. and Canadian assets.

The financing provides flexibility to convert the term loan into a post-petition financing package should the company pursue an in-court restructuring.

The company’s existing secured creditors will receive a lien, junior to the senior lien securing the financing, on substantially all of the company’s domestic assets that did not previously secure existing debt.

Proceeds from the financing will provide additional liquidity and will be used to fully repay both the company’s San Juan term loan and its existing asset-based revolvers, simplifying its capital structure, according to the release.

The additional liquidity will give the company and its advisers more time to continue negotiations with the ad hoc group to develop a comprehensive restructuring plan that will “right-size the company’s capital structure and better ensure the long-term viability of Westmoreland,” the release said.

“We appreciate the confidence our secured creditors continue to show through their increased financial support and their constructive ongoing dialogue,” Michael Hutchinson, Westmoreland’s interim chief executive officer, said in the release.

“In the months ahead, we will continue our evaluation and determine the appropriate strategic, operational and financial structure to support the continued future growth of our business,” Hutchinson added.

Neither Westmoreland Resources Partners, LP nor any of its subsidiaries will be obligors under the new financing package, the company noted.

Westmoreland is a coal company based in Englewood, Colo.

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