November 14, 2018 Read More →

After exec bonuses and cuts to worker benefits, U.S. coal miner Cloud Peak weighs sale

Wyoming Public Radio:

Cloud Peak Energy, one of the largest coal producers in the country with two mines in Wyoming, announced today it will review strategic alternatives which include a potential sale of the company. The announcement comes after company stock shares hit a 52-week low today at $1.32. That’s nearly half of its value from this time last year.

Clark Williams-Derry, director of energy finance at Sightline Institute, an environmental research center, said “strategic alternatives” could be a potential sale of the company. It could also mean the sale of a mine or any kind of asset, refinancing existing debt, pushing debt out further, or doing nothing.

Williams-Derry says this comes as Cloud Peak has seen declining profit margins, lower profits in coal and a huge debt payment coming up.

Cloud Peak Energy did not lay out a concrete timeline for the process and wrote in its announcement not to expect updates on it either.

In a filing today, the company announced it would double the salaries of executives to retain them through “ongoing challenges.” This comes after a third-quarter announcement at the end of October to cut medical benefits for retired workers.

Rob Godby, energy economist at the University of Wyoming, said the timing makes sense.

“If selling the company was the strategy, canceled medical benefits makes much more sense, as reducing that liability makes the company more valuable,” he said.

More: Cloud Peak Energy Considers Selling Company; Gives Executive Bonuses, Cuts Retirement Benefits

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