September 15, 2015 Read More →

Following a ‘Well-Trodden’ Path to Bankruptcy

Garrett Devine for SNL:

Alpha Natural Resources Inc. and Walter Energy Inc., like other U.S. coal producers before them, followed a similar path into bankruptcy court and it all began about four years ago.

Alpha received a warning from the New York Stock Exchange in April for not meeting the listing standards, was delisted in July, and was forced to file for bankruptcy in the beginning of August.

The bankruptcy comes four years after Alpha acquired a large metallurgical coal producer in June 2011 at the peak of the met coal market, as part of its $8.5 billion merger with Massey Energy Co. At the time of the merger, the combined company was said to have one of the world’s largest and highest-quality met coal reserve bases.

Walter, similar to Alpha, was warned by the NYSE in March 2015 for not meeting the listing standard as the stock price was trading below $1. The company was delisted in early July after the company was deemed no longer suitable for listing. Walter acquired met coal producer Western Coal Corp. for $3.3 billion in April 2011. The fall of the met coal market accelerated in 2014 — referred to by some as “annus horribilis” — and further exposed the pure-play met coal producer to a weakening market.

For some US coal producers, the path to bankruptcy is well trodden ($)

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