Arch Resources Announces Exchanges with Holders of Approximately $125.2 Million Principal Amount of Convertible Notes

ST. LOUIS, May 19, 2022 /PRNewswire/ — Arch Resources, Inc. (NYSE: ARCH) (“Arch Resources” or “we”) announced today that the May 18, 2022it has entered into separate, privately negotiated exchange agreements with a limited number of holders of its 5.25% senior convertible bonds due 2025 (the “Bonds”) to exchange (collectively, the “Exchanges”) approximately $125.2 million principal amount of the notes for consideration consisting of a total of approximately $130.1 million in cash and a number of common shares of Arch Resources to be determined over a period of four consecutive trading days commencing on and including, May 19, 2022. Trades should be consummated on or about May 25, 2022, subject to customary closing conditions. Exchanged tickets will be removed at the end of exchanges. Following the close of trading, Arch Resources expects approximately $30.0 million the full principal amount of the Notes will remain outstanding with unchanged terms.

Arch Resources logo (PRNewsfoto/Arch Resources, Inc.)

Arch Resources is undertaking these exchanges in accordance with its previously stated objective of improving and simplifying its capital structure, and is using a substantial amount of cash in the settlement process to limit overall stock dilution, prevent potential future dilution resulting from expected future dividend payments, reduce overall indebtedness and eliminate future annual interest payments.

The exchanges are being made by way of private placements, and all common shares to be issued in connection with the exchanges will be issued pursuant to exemption from the registration requirements of the Securities Act 1933, as amended (the ” Securities Act”) granted by Section 4(a)(2) of the Securities Act in transactions not involving a public offering. This press release is neither an offer to sell nor a solicitation of an offer to buy any of the securities described above, and there will be no offer, solicitation or sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

As part of the Exchanges, Arch Resources also intends to enter into certain capped call early settlement agreements (the “Capped Call Early Settlement Agreements”) with counterparties to Arch Resources’ capped call transactions. (the “capped call counterparties”), which were entered into as part of the bond issue, to terminate part of these purchase transactions capped by a notional amount corresponding to the amount of the bonds exchanged (the ” anticipated outcomes”). We anticipate that the Capped Call Counterparties will settle the Early Closeouts by delivering to Arch Resources a number of Arch Resources Common Shares equal to the Early Closeout Consideration on or about May 26, 2022. Pursuant to these settlements, Capped Call Counterparties and/or their respective affiliates may purchase shares of Arch Resources common stock in secondary market transactions.

About Arch Resources

Arch Resources is a leading producer of high quality metallurgical products for the global steel industry. The company operates large, modern and highly efficient mines that consistently set the industry standard for mine safety and environmental stewardship.

Forward-Looking Statements: This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, c i.e. statements relating to future and not past events. In this context, forward-looking statements often deal with our expected future business and financial performance and often contain words such as “should”, “could”, “appear”, “estimate”, “expect”, “anticipate”. , “intends,” “may,” “plans,” “predicts,” “projects,” “believes,” “seeks” or “will.” Actual results may differ materially from those projected due to many factors, including: the impacts of the COVID-19 pandemic; changes in coal prices, which may be caused by many factors beyond our control, including changes in domestic and foreign supply and demand of coal and domestic and foreign demand for steel and electricity; volatile economic and market conditions; operating risks beyond our control, including risks relating to mining conditions, failures or maintenance issues mining, processing and plant equipment, natural and weather disasters, unavailability of raw materials, equipment or other critical supplies, mining accidents and other risks inherent in coal mining beyond our control; loss of availability, reliability and profitability of transmission facilities and fluctuations in transmission costs; inflationary pressures and the availability and price of mining and other industrial supplies; the effects of foreign and domestic trade policies, actions or disputes on the level of trade between the countries and regions in which we operate, the competitiveness of our exports or our ability to export; competition, both within our industry and with producers of competing energy sources, including the effects of any current or future legislation or regulations designed to support, promote or mandate renewable energy sources; alternative steelmaking technologies that may reduce demand for our coal; loss of key personnel or inability to attract additional qualified personnel and availability of qualified employees and other labor factors; our ability to obtain new coal supply agreements or renew existing coal supply agreements; the loss or significant reduction in purchases of our largest customers; disruptions in the supply of coal to third parties; risks related to our international growth; our relationships with, and other conditions affecting, our customers and our ability to collect payments from our customers; the availability and cost of bonds, including potential collateral requirements; additional requests for credit support by third parties and decisions by banks, surety providers or other counterparties to reduce or eliminate their exposure to the coal industry; inaccuracies in our estimates of our coal reserves; defects in title or loss of a leasehold interest; losses resulting from certain marketing and asset optimization strategies; cyberattacks or other security breaches that disrupt our operations or result in the unauthorized disclosure of proprietary, confidential or personally identifiable information; our ability to acquire or develop coal reserves in an economically feasible manner; our ability to comply with restrictions imposed by our term loan facility and other financing agreements; our ability to service our outstanding indebtedness and raise the necessary funds to redeem Notes for cash following a fundamental change or to pay cash amounts due upon conversion; existing and future laws and regulations affecting both our coal mining operations and the use of coal by our customers; government policies and taxes, including those aimed at reducing emissions of elements such as mercury, sulfur dioxides, nitrogen oxides, particulates or greenhouse gases; increased pressure from political and regulatory authorities, as well as environmental and climate change activist groups, and lending and investment policies adopted by financial institutions and insurance companies to address concerns about the impacts environmental effects of burning coal; increased attention to environmental, social or governance issues; our ability to obtain and renew various permits necessary for our mining operations; risks relating to regulators ordering the temporary or permanent closure of some of our mines in certain circumstances; risks related to extensive environmental regulations that impose significant costs on our mining operations and could result in significant litigation or liability; the accuracy of our reclamation estimates and other mine closure obligations; the existence of hazardous substances or other environmental contamination on property we own or use; risks relating to tax legislation and our ability to utilize net operating losses and certain tax credits; our ability to pay basic or variable dividends in accordance with our announced return of capital program, and other risks as disclosed in our most recent Annual Report on Form 10-K and subsequent filings with the SEC. All forward-looking statements contained in this press release, as well as all other written and oral forward-looking statements attributable to us or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements contained in this section and elsewhere in this press release. These factors are not necessarily all important factors that could affect us. These risks and uncertainties, and other risks that we are not aware of or that we currently believe are not material, may cause our actual future results to differ materially from those expressed in our forward-looking statements. These forward-looking statements speak only as of the date such statements were made, and we do not undertake to update our forward-looking statements, whether as a result of new information, future events or otherwise. except as may be required by federal securities laws.



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SOURCE Arch Resources, Inc.

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