Oxford Mining lenders agree to extend forbearance period to July 1

By Marisa Wong

Madison, Wis., June 19 - Oxford Mining Co. LLC entered into a supplement to the forbearance agreement to its credit agreement to extend the forbearance period to July 1, according to an 8-K filing with the Securities and Exchange Commission.

The company entered into the supplement on June 18 with administrative agent Citicorp USA, Inc. and majority lenders Citibank, NA, Fifth Third Bank, Societe Generale, Barclays Bank plc, Huntington National Bank, Wells Fargo Bank, NA, Raymond James Bank, NA and Credit Suisse AG, Cayman Islands Branch.

The initial forbearance agreement, completed on May 14, stated that effective from May 15 Oxford Mining has failed to comply with specific financial covenants in the credit agreement, which constitutes immediate events of default. As a result, the lenders would have been able to declare all outstanding amounts under the credit agreement immediately due and payable.

However, the majority lenders agreed to forbear from exercising their default-related remedies against the company for a period beginning on May 14 and ending on the earliest of June 15 - now changed to July 1 - the occurrence of a bankruptcy or other similar default, the occurrence of any other event of default and the occurrence of particular early termination events specified in the forbearance agreement.

The credit agreement, dated July 6, 2010, is comprised of a $115 million revolving credit line that matures in July 2013 and a $60 million term loan that matures in July 2014.

As of June 18, Oxford Mining had $147.5 million of borrowings outstanding, including $104 million under the revolving credit line and $43.5 million under the term loan. The company also had $10.9 million in letters of credit outstanding.

Oxford Mining is a Columbus, Ohio-based producer of steam coal and surface mined coal.

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