October 3, 2019 Read More →

Murray Energy, largest private U.S. coal company, facing serious financial difficulties

Bloomberg:

Murray Energy Corp., the U.S. coal giant that had pressed the Trump administration for help averting bankruptcy, may be headed toward default.

The largest closely held coal miner in America failed to make multiple payments to lenders this week, the company said in a statement on Wednesday. Creditors have agreed not to take legal action until Oct. 14, buying Murray some time to figure out how to shore up its balance sheet, the St. Clairsville, Ohio-based firm said.

Murray Energy is struggling to stay afloat, along with the rest of America’s coal miners, as cheap natural gas and renewable energy resources cut into coal’s share of the U.S. power market. At least four companies including Cloud Peak Energy Inc. and Blackjewel LLC have gone bankrupt this year, laying bare the decline of a fuel that once accounted for more than half of all U.S. power generation. Today it’s less than 25%.

Prices for thermal coal — the kind burned by power plants — have slumped, which may have left Murray short on cash, said Lucas Pipes, a coal analyst with B Riley FBR Inc. “You can’t make payments out of thin air if the money isn’t in the bank,” he said.

The company idled some of its mines in West Virginia last month, citing “severely depressed coal markets.”

The company’s 2024 notes with about $500 million outstanding traded at 1 cent on the dollar last month, down from above 60 cents late last year, according to Trace price data.

More: U.S. coal giant that pressed Trump for bailout faces default

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