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Cloud Peak Energy Inc. (NYSE:CLD) Files An 8-K Entry into a Material Definitive Agreement

ME Staff 8-k

Cloud Peak Energy Inc. (NYSE:CLD) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.

Amendment to Asset Purchase Agreement

As previously reported, in connection with Cloud Peak Energy Inc.’s and substantially all of its direct and indirect subsidiaries’ (collectively, the “Company”) ongoing cases under Chapter 11 (“Chapter 11”) of Title 11 of the U.S. Code, on August 19, 2019, the Company and Navajo Transitional Energy Company, LLC (the “Purchaser”) entered into an Asset Purchase Agreement (as amended, the “Asset Purchase Agreement”) providing for the acquisition by the Purchaser of substantially all of the Company’s assets, including the Company’s Spring Creek, Cordero Rojo and Antelope mines. On October 21, 2019, the Company and the Purchaser entered into the Second Amendment to the Asset Purchase Agreement (the “Second Amendment”). The Second Amendment, among other things, amended the Asset Purchase Agreement to provide for the Purchaser to acquire certain additional assets and assume certain additional liabilities, to modify the Purchaser’s assumption and rejection of certain contracts and leases, to provide for certain post-closing insurance matters and to modify the terms of the promissory note to be made by the Purchaser (the “Note”), including making the Note an unsecured obligation, increasing the interest rate thereon to 9% per annum, instituting cumulative increases in principal amount outstanding if the Note is not paid off upon applicable anniversaries of the closing date, providing for $2.0 million of quarterly amortization through maturity and modifying certain negative covenant terms of the Note. The terms of the Note are described in the term sheet attached as Exhibit E to the Second Amendment filed as Exhibit 10.1 hereto.

On October 2, 2019, the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) entered an Order (I) Approving Sale of the Debtors’ Assets Free and Clear of Liens, (II) Approving Assumption and Assignment of Executory Contracts and Unexpired Leases, and (III) Granting Related Relief [Docket No. 674], to which the Bankruptcy Court approved the sale of substantially all of the Company’s operating assets, including the Company’s Spring Creek, Cordero Rojo and Antelope mines, to the Purchaser to the Asset Purchase Agreement. The Second Amendment is subject to approval by the Bankruptcy Court at a hearing to be held with the Bankruptcy Court on October 22, 2019. Subject to the satisfaction of certain closing conditions, the transactions contemplated by the Asset Purchase Agreement are expected to close in October 2019.

On October 4, 2019, the Company filed the Joint Chapter 11 Plan of Cloud Peak Energy Inc. and Certain of its Debtor Affiliates [Docket No. 680]. On October 14, 2019, the Company filed the First Amended Joint Chapter 11 Plan of Cloud Peak Energy Inc, and Certain of its Debtor Affiliates [Docket No. 711] (the “Plan”). The Company anticipates seeking confirmation of the Plan by the Bankruptcy Court at a hearing to be held with the Bankruptcy Court on December 5, 2019 at 9:30 a.m. (Eastern Time).

The description of the Second Amendment herein is only a summary thereof and is qualified in its entirety by reference to the full text of the Second Amendment, which is filed as Exhibit 10.1 hereto and which is incorporated by reference herein.

Amendment to DIP Credit Agreement

On October 21, 2019, the Company entered into Amendment No. 11 to the Company’s Superpriority Senior Secured Priming Debtor-in-Possession Credit Agreement (the “DIP Credit Agreement”, and such amendment, “Amendment No. 11”) with the lenders party thereto and Ankura Trust Company, LLC, as Administrative Agent and Collateral Agent.  Amendment No. 11, among other things, extends the milestone dates set forth in the DIP Credit Agreement by which the transactions contemplated by the Asset Purchase Agreement must close.

The description of Amendment No. 11 herein is only a summary thereof and is qualified in its entirety by reference to the full text of Amendment No. 11, which is filed as Exhibit 10.2 and is incorporated by reference herein.

Cautionary Note Regarding Forward-Looking Statements

This Report on Form 8-K contains “forward-looking statements” within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are not statements of historical facts and often contain words such as “may,” “will,” “expect,” “believe,” “anticipate,” “plan,” “estimate,” “seek,” “could,” “should,” “intend,” “potential,” or words of similar meaning. Forward-looking statements are based on management’s current expectations, beliefs, assumptions and estimates regarding the Company, industry, economic conditions, government regulations and energy policies

and other factors. Forward-looking statements may include, for example, the closing of the transactions contemplated by the Asset Purchase Agreement, as amended, the ability of the Company to sell its remaining real estate assets, the anticipated occurrence of hearing dates on schedule during the Company’s Chapter 11 cases, and other statements regarding the Company’s plans, strategies, prospects and expectations concerning its business, operating results, financial condition, liquidity and other matters that do not relate strictly to historical facts. These statements are subject to significant risks, uncertainties, and assumptions that are difficult to predict and could cause actual results to differ materially and adversely from those expressed or implied in the forward-looking statements, including risks and uncertainties regarding the Company’s ability to continue as a going concern, the Company’s ability to successfully complete a sale process under Chapter 11; potential adverse effects of the Chapter 11 cases on the Company’s liquidity and results of operations; the Company’s ability to obtain timely approval by the Bankruptcy Court with respect to the motions filed in the Chapter 11 cases; objections to the sale process or other pleadings filed that could protract the Chapter 11 cases; employee attrition and the Company’s ability to retain senior management and other key personnel due to the distractions and uncertainties, including its ability to provide adequate compensation and benefits during the Chapter 11 cases; the Company’s ability to comply with the restrictions imposed by its Accounts Receivable Securitization Program, the DIP Credit Agreement and other financing arrangements; the Company’s ability to maintain relationships with suppliers, customers, employees and other third parties and regulatory authorities as a result of the Chapter 11 filing; the effects of the bankruptcy petitions on the Company and on the interests of various constituents, including holders of the Company’s common stock; the Bankruptcy Court’s rulings in the Chapter 11 cases, and the outcome of the Chapter 11 cases generally; the length of time that the Company will operate under Chapter 11 protection and the continued availability of operating capital during the pendency of the proceedings; risks associated with third-party motions in the Chapter 11 cases, which may interfere with the Company’s ability to consummate a sale; and increased administrative and legal costs related to the Chapter 11 process and other litigation and inherent risks involved in a bankruptcy process. Forward-looking statements are also subject to the risk factors and cautionary language described from time to time in the reports and registration statements the Company files with the Securities and Exchange Commission, including those in Part I, Item 1A – Risk Factors in its most recent Form 10-K and any updates thereto in its Forms 10-Q and current reports on Form 8-K. Additional factors, events, or uncertainties that may emerge from time to time, or those that the Company currently deems to be immaterial, could cause its actual results to differ, and it is not possible for the Company to predict all of them. The Company makes forward-looking statements based on currently available information, and it assumes no obligation to, and expressly disclaim any obligation to, update or revise publicly any forward-looking statements made in this report, whether as a result of new information, future events or otherwise, except as required by law.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits.

CLOUD PEAK ENERGY INC. Exhibit
EX-10.1 2 a19-20710_1ex10d1.htm EX-10.1 Exhibit 10.1   Execution Version   SECOND AMENDMENT TO THE ASSET PURCHASE AGREEMENT   This SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT (this “Amendment”),…
To view the full exhibit click here

About Cloud Peak Energy Inc. (NYSE:CLD)

Cloud Peak Energy Inc. is a producer of coal in the United States of America and the Powder River basin (PRB). The Company owns and operates three surface coal mines: the Antelope Mine, the Cordero Rojo Mine, and the Spring Creek Mine. The Company operates through two segments: Owned and Operated Mines segment, and Logistics and Related Activities. The Company’s Owned and Operated Mines segment is characterized by the focus on thermal coal production. Its segment includes the Company’s Antelope Mine, Cordero Rojo Mine, and Spring Creek Mine. The Company’s Logistics and Related Activities segment is characterized by the services the Company provides to its international and domestic customers. The services provided by it include the purchase of coal from third parties or from its owned and operated mines, at market prices, as well as the contracting and coordination of the transportation and other handling services from third-party operators, which are rail and terminal companies.

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