March 7, 2019 Read More →

Financial woes may land PRB coal producer Cloud Peak in bankruptcy

Casper Star Tribune:

Even as the bottom was falling out, Cloud Peak kept a brave face in calls with investors. All through 2018, executives said they hoped for a cold winter and praised the one bright spot in their company’s outlook: its export success. Similarly, Cloud Peak has represented a bright spot for Wyoming, a solution to declining domestic demand. It is the only company operating in Wyoming – whose financial filings are public – that is sending Powder River Basin coal to Asia.

And now that company is in trouble.

The Gillette-based company is not gritting its teeth and smiling anymore — it is too busy facing up to a likely delisting from the New York Stock Exchange. Cloud Peak is cutting costs like retiree health benefits and communications staff to staunch the cash bleed reported in financial statements. It recently hired outside consultants to weigh its options — including a sale, a potential restructuring and an expected bankruptcy.

“The question of whether or not Cloud Peak goes bankrupt could have some short-term effects on exports, but there’s a bigger question,” said Clark Williams-Derry, director of energy finance for the Sightline Institute, a think tank in Seattle that advocates a transition to green energy. “The question is: Do exports make economic sense?”

For now, most say, they don’t.

Cloud Peak’s financial troubles are related to the downturn in demand in the domestic market, rather than what is happening in their small piece of the Asian market. The company only sends about 5 percent of its production overseas, he said.

More: With Wyoming’s only coal exporter facing potential bankruptcy, what happens to the export dream?

 

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