AEI Bankruptcy Reorganization Plan Approved By Court, Bobby Brown Joins Board Of Directors – AEI Resources – Brief Article
A federal bankruptcy court in mid-April approved a reorganization plan for AEI Resources Holding Inc. that results in the exodus of brothers Stephen and Larry Addington, who founded the company, and the addition of longtime coal industry heavyweight B.R. “Bobby” Brown to AEI’s reorganized board of directors.
With approval of the plan by the U.S. Bankruptcy Court for the Eastern District of Kentucky, the Ashland, Ky.-based company was expected to exit Chapter 11 by the end of April. That would represent a remarkably brief stay in Chapter 11 for AEI, which filed a pre-packaged petition Feb. 28 to reorganize its finances.
The company’s new board and a realignment of management were scheduled to take effect upon AEI’s departure from Chapter 11. Also, as of the effective date of the reorganization, the company was poised to gain access to its $250 million exit financing facility from Deutsche Bank, which also arranged AEI’s $150 million debtor-in-possession (DIP) facility. The exit facility was to be used to repay the DIP facility and would be available to supplement cash flow to fund day-to-day operations and capital expenses.
In a statement, Donald Brown, AEI’s chairman and CEO, said it is “time to focus on the future. Despite the temporary impact of the unusually warm weather, our long-term prospects for production, revenues, and earnings remain strong. With our new capital structure, we can now concentrate our energies on further strengthening our operations and our financial performance in three specific areas. First, management will focus on obtaining maximum cost reductions and productivity improvements at each operation. Second, safety and loss control will continue to be a top priority of all employees. Third, we will continue to pay down debt to enhance financial flexibility.”
Under the reorganization plan, Larry Addington, who still owned a controlling interest in the company, will sever his ties with AEI, and his younger brother, Stephen Addington, will step down as president “to pursue other interests.” Donald Brown will add the additional title of company president.
B.R. Brown, who spent more than two decades in senior management with CONSOL Energy, is coming out of retirement to join AEI’s newly constituted board. Brown has more than 40 years of experience in the industry, most recently as chairman, CEO, and a director of CONSOL. For years, he also served as chief labor negotiator for the Bituminous Coal Operators Association.
Other board members include Donald Brown; Robert Scharp, former CEO of Anglo Coal Australia Pty. Ltd. (previously Shell Coal Group); John Delucca, currently executive vice president of finance and administration, CFO and member of the executive committee of Coty Inc., a cosmetics-related company; and Scott Tepper, vice chairman of the board of Bio-Plexus, a medical device company.
COPYRIGHT 2002 PRIMEDIA Business Magazines & Media Inc. All rights reserved.
COPYRIGHT 2003 Gale Group