The owner of Sunrise Coal — which permanently closed its mining operation in Carlisle in March — confirmed it is receiving funding through the Paycheck Protection Program due to the current COVID-19 pandemic.
The nearly $350 billion fund is intended to aid faltering small businesses from the economic impact of the coronavirus.
In a company news release dated April 15, Hallador Energy Co. "Received approval for a $10 million loan at a 1% interest rate under the Federal Paycheck Protection Program. Hallador, which is headquartered in Terre Haute, plans to utilize PPP funds to pay two months of payroll and other covered expenses.
"Under the terms of the CARES Act, the Company expects at least 80% of the loan to be forgiven by maintaining current staffing levels through June 30."
According to an article this week in Inside Indiana Business, the program is intended to support small businesses, which are often those with less than 500 employees. However, the definition of ‘small business’ varies by industry. Some coal-mining firms with up to 1,500 employees could qualify for a PPP loan.
According to the article, a recent filing with the government shows Hallador had 768 employees, after the closure of the Sunrise Coal Mine in Carlisle.
According to an article this week in the Washington Post, under Small Business Administration guidelines, it also said some bituminous coal mining firms with up to 1,500 employees can qualify for the loans.
According to the Post article, Hallador did not reply to questions about the loan.
The article also mentioned the company has "two important ties to the Trump administration: Scott Pruitt, the former Environmental Protection Agency administrator, was hired last year to lobby for the publicly traded firm in Indiana; and the company's former government relations director now works at the Energy Department."
The PPP program ran out of funding after just two weeks during this sudden economic downturn, but the Congress — Senate has approved — and White House are nearing a deal providing about an additional $310 billion to replenish the fund.
In Hallador's press release on April 15, Brent Bilsland, President and Chief Executive Officer, commented, "During these unprecedented times, we are taking proactive steps to plan for the future of Hallador Energy Company's customers, employees and investors. Our actions are designed to increase our financial abilities so that we can ensure consistency at a time when the world is experiencing great volatility."
The release noted due to the impacts of the COVID-19 pandemic, Hallador is expecting lower sales of 6.5 million tons in 2020 versus prior guidance of 6.7 million tons. Additionally, the company anticipates shipments being weighted towards the second half of the year.
In anticipation of COVID-19 shipment delays and potential production interruptions, Hallador has
• Amended its credit agreement to increase its allowable leverage
ratios, providing approximately $50 million in liquidity.
• Suspended its quarterly dividend indefinitely.
Hallador stated it will file its Quarterly Report on Form 10-Q after the market closes on May 11. In response to the pandemic, Hallador's annual shareholder meeting will now be held at 11 a.m. on Aug. 13, in Terre Haute.