Arch Resources – Exchange of Holders of Convertible Notes

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

ST. LOUIS, MO (STL.News) Arch Resources, Inc. (NYSE: ARCH) (“Arch Resources” or “us”) today announced that on May 18, 2022, it entered into separate, privately negotiated exchange agreements with a limited number of holders of its 5.25% Convertible Senior Notes due 2025 (the “notes”) to exchange (collectively, the “exchanges”) approximately $125.2 million principal amount of notes for consideration consisting of an aggregate of approximately $130.1 million in cash and a number of shares of Arch Resources’ common stock to be determined over a four consecutive trading day period beginning on, and including, May 19, 2022.  The exchanges are expected to be consummated on or about May 25, 2022, subject to customary closing conditions.  The notes being exchanged will be retired upon completion of the exchanges.  Following the closing of the exchanges, Arch Resources expects that approximately $30.0 million in aggregate principal amount of Notes will remain outstanding with terms unchanged.

Arch Resources is undertaking these exchanges in keeping with its previously stated goal of enhancing and simplifying its capital structure and is utilizing a substantial amount of cash in the settlement process in order to limit overall stock dilution, prevent potential future dilution stemming from expected future dividend payments, reduce overall indebtedness, and eliminate future annual interest payments.

The exchanges are being conducted as private placements, and any shares of common stock to be issued in the exchanges will be issued pursuant to the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), afforded by Section 4(a)(2) of the Securities Act in transactions not involving any public offering.  This press release is neither an offer to sell nor a solicitation of an offer to buy any securities described above, nor will there be any offer, solicitation, or sale of any securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful.

In connection with the exchanges, Arch Resources also intends to enter into certain capped call early unwind agreements (the “capped call early unwind agreements”) with counterparties to Arch Resources’ capped call transactions (the “capped call counterparties”), which were entered into in connection with the issuance of the notes, to terminate a portion of such capped call transactions in a notional amount corresponding to the amount of the notes exchanged (the “early unwinds”).  Accordingly, we expect that the capped call counterparties will settle the early unwinds by delivering to Arch Resources a number of shares of Arch Resources’ common stock corresponding to the consideration in respect of the early unwind on or about May 26, 2022.  In connection with such settlements, the capped call counterparties and/or their respective affiliates may buy shares of the Arch Resources’ common stock in secondary market transactions.