Robert Murray, Founder and CEO, Murray Energy

Murray Energy, which was the largest privately held coal company in the United States, has filed for Chapter 11 bankruptcy protection in the Southern District of Ohio.

The company said it has entered into a restructuring agreement with an ad hoc lender group holding more than 60% of roughly $1.7 billion in debt.

It plans to continue operations with $350 million new money debtor-in-possession financing.

“Although a bankruptcy filing is not an easy decision, it became necessary to access liquidity and best position Murray Energy and its affiliates for the future of our employees and customers and our long-term success,” the company’s founder and chief executive officer, Robert Murray, said in a statement.

Murray has been a vocal supporter of President Donald Trump and has reportedly exerted great influence on Trump administration energy policy. He urged rollbacks of Obama-era regulations and called the Federal Energy Regulatory Commission “feckless” as well as saying climate change was a “hoax.”

The announcement comes as U.S. demand for coal has dropped to its lowest levels in 40 years as consumers shift to renewable energy sources. At least seven coal companies, including Blackjewel Mining in West Virginia and Cloud Peak Energy in Wyoming, have gone bankrupt this year.

According to forecasts from the U.S. Energy Information Administration, U.S. coal production is expected to fall to 159 million short tons in the fourth quarter of 2019, a decrease of 17% over the same period last year.

The company has 7,000 employees and operates 17 active mines.

Under the restructuring agreement, Robert Murray will be chairman of the board of Murray NewCo and Murray’s nephew Robert Moore will be president and CEO.

Evercore is acting as Murray Energy’s investment banker; and Alvarez & Marsal is acting as financial adviser. Houlihan Lokey Capital is acting as investment banker to the ad hoc lender group.

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