(Bloomberg) -- Robert E. Murray, the U.S. coal baron who pressed the Trump administration to help save America’s struggling miners, placed his company into bankruptcy as demand for the fossil fuel continues to weaken.
Murray Energy Corp. filed for Chapter 11 protection in the Southern (NYSE:SO) District of Ohio bankruptcy court. The miner -- the largest privately owned U.S. coal company -- said it reached a restructuring agreement with a group of lenders, according to a statement on Tuesday.
The move comes more than a year after the Trump administration’s efforts to subsidize struggling nuclear and coal-fired power plants failed, shot down by Trump’s own appointed energy regulators. Some of those plants were Murray Energy’s customers. Robert Murray, a big donor to Trump’s campaign, was instrumental in setting his energy agenda and has hosted multiple fundraisers.
On Tuesday, the company named Robert Moore as president and chief executive officer of Murray Energy. It also said it plans to finance operations during the Chapter 11 with its available cash and a $350 million debtor-in-possession financing facility. Under the restructuring agreement, the lender group will form a new entity -- called Murray NewCo -- that will acquire the company’s assets.
The company’s collapse underscores how deeply cheap natural gas and renewable energy resources have cut into coal’s share of the U.S. power market. Cloud Peak Energy Inc., Cambrian Coal Co., Blackjewel LLC and Blackhawk Mining LLC have all filed for bankruptcy this year. Their downfall mirrors waning demand for fuel that as recently as 2003 accounted for more than half of all U.S. power generation.
Murray warned in 2017 that the shifts in the industry could push it into bankruptcy. The company initially chose to avoid that route and persuaded creditors to ease its debt load somewhat. But analysts said this left the company at a disadvantage with rivals because it remained saddled with high costs and interest expenses.
Robert Murray, who began working in coal mines at 16 to support his family, founded his St. Clairsville, Ohio-based company in 1988 and has been one of the industry’s biggest cheerleaders.
He led the fight against President Barack Obama’s clean-air rules, filing numerous legal challenges and calling the Democrat “the greatest enemy I’ve ever had in my life.” His company donated $1 million to a political action committee backing Trump’s agenda in the 2018 election.
(Michael R. Bloomberg, the founder and majority stakeholder of Bloomberg LP, the parent company of Bloomberg News, has committed $500 million to launch Beyond Carbon, a campaign aimed at closing the remaining coal-powered plants in the U.S. by 2030 and slowing the construction of new gas plants.)