Walter Energy, Inc.NYSE
Mon, Feb. 1, 1:32 PM
- Walter Energy (NYSE:WLT) agrees to sell its remaining non-core U.S. assets to affiliates of Virginia Conservation Legacy Fund, the same non-profit that scooped up Patriot Coal’s coal mines out of bankruptcy.
- The non-profit will pay only $1 for Walter West Virginia mines and the company's Alabama coking operations, but it will take responsibility for the liabilities tied to the assets, including environmental obligations; the value of the liabilities is not yet clear.
- The sale disposes of most of the U.S. assets that remain once WLT’s lenders take over its core Alabama mining operations as part of a deal that includes ~$1B in debt forgiveness.
Nov. 23, 2015, 6:22 PM
- Walter Energy (NYSE:WLT) is asking for a bankruptcy court’s approval to end employment agreements with its unions and stop funding retiree benefits so it can move ahead with the sale of its Alabama coal operations, Dow Jones reports.
- WLT’s lenders, which plan to acquire the Alabama operations, say they will not be bound by union pacts that seek to hold the successors to their terms; WLT says this should come as no surprise in light of the agreements’ “onerous" terms.
- The United Steelworkers union says it will fight the request, but WLT says the coal industry downturn leaves it with little choice.
Nov. 5, 2015, 6:15 PM
- Walter Energy (NYSE:WLT) appears headed to a January bankruptcy auction, as senior lenders offer to cancel or take on $1.25B of the company’s debts to set a floor price for the competition, WSJ reports.
- WLT has abandoned a turnaround effort and resorted to a sale because its "financial condition is continuing to deteriorate and unexpected operational difficulties have exacerbated the situation," court papers say; WLT’s deals with unions are not part of the proposed senior lender buyout package.
- The proposed sale plan replaces a debt-for-equity swap that fell apart, which had threatened to wipe out junior creditors and put jobs and retirees in jeopardy.
Sep. 29, 2015, 3:57 PM
- Walter Energy (NYSE:WLT) is granted continued access to cash for another month, giving it more time to sit down again with its lenders at the bargaining table as the company looks to reset and negotiate a new restructuring deal.
- It is the second cash collateral motion the bankruptcy court judge has signed in the case after changes required in the first cash motion were not acceptable to lenders and voided the pre-bankruptcy restructuring agreement.
- The judge's approval comes over the objections of the unsecured creditors committee, which includes the unions representing WLT’s employees, and others that said the motion gave too much away to lenders.
Sep. 24, 2015, 2:23 PM
- Walter Energy's (NYSE:WLT) restructuring agreement with its lenders has fallen apart, and the company is pleading with the judge at the U.S. Bankruptcy Court in Birmingham, Ala., for a new cash order that would appease its lenders and grant 30 days to reset.
- The lenders state in court documents that the deal was terminated after the judge made changes to the support agreement that they did not like.
- The judge says she fears “this case is going to crash and burn" if lenders and committees representing unsecured creditors and retired workers cannot set aside their differences.
Aug. 3, 2015, 12:42 PM
- With Alpha Natural Resources (NYSE:ANR) filing for bankruptcy, Fitch Ratings among others thinks Arch Coal (NYSE:ACI) is next, but Cowen analysts believe ACI may escape ANR’s fate.
- The firm cuts its rating on ACI to Market Perform from Outperform with a $0.25 price target but believes investors should not give up on the stock entirely, noting the company has been “proactive in addressing debt levels with a private debt offering, has managed its cash burn, and is pursuing a reverse stock split.”
- ACI is better positioned than ANR or Walter Energy (NYSE:WLT), Cowen says, as its operations were cash margin positive in H1, cash flow is expected to be break even to slightly up for the rest of the year, and a majority of its open Powder River Basin book is skewed towards higher Btu coal which commands better pricing.
- Today, ACI announced an extension of its private debt exchange offer.
Jul. 15, 2015, 12:57 PM
- Walter Energy (NYSE:WLT) files for bankruptcy after agreeing on a fast-track restructuring process that will hand ownership to senior creditors.
- WLT says only its U.S. units have filed for prepackaged Chapter 11 bankruptcy protection, and that operations in Canada and the U.K. are not included in the filings.
- WLT says it has enough cash to assure that vendors and suppliers would be paid during the reorganization process.
- The company had ~$435M in cash and $3B of debt as of March 31.
Jul. 14, 2015, 6:50 PM
- Walter Energy (NYSE:WLT) is preparing to file for Chapter 11 bankruptcy this week after agreeing on a fast-track restructuring process that would hand ownership of the coal miner to senior creditors and largely wipe out junior creditors, WSJ reports.
- WLT and a group of senior bond and loan holders reportedly are finalizing an agreement that would allow the company to use cash pledged as collateral to fund its operations in bankruptcy.
Jul. 13, 2015, 4:58 AM
- U.S. power stations generated 31% of electricity from natural gas in April compared with 30% from coal, research firm SNL Energy estimates, the first time that gas has overtaken coal. In 2010, the latter accounted for 45% of power.
- The milestone has been a long time in coming, with the shale boom causing gas prices to plummet and increasing regulation leading to higher expenses for coal.
- Coal tickers: WLT, ACI, BTU, ANR, CLD, RNO, WLB, CNX,
Jul. 2, 2015, 11:39 AM
- Walter Energy’s (WLT -6.7%) senior creditors are entering confidential talks with the company to reorganize it in bankruptcy court and hand ownership to the lenders, Bloomberg reports.
- The group, which owns WLT’s first-lien bonds and loans, reportedly will submit a draft plan to the coal miner that calls for converting their debt into equity.
- The senior lenders are said to want WLT to file for bankruptcy by July 15, when the grace period on a $19M interest payment due to junior bondholders ends.
- WLT has been discussing a reorganization since April as it struggles with a $3.1B debt load and the coal downturn.
Jun. 30, 2015, 11:25 AM
- Coal companies (KOL -0.8%) are surrendering much of the gains they enjoyed following yesterday's Supreme Court decision against the EPA's mercury emissions regulations, as the initial reaction may prove rosier than the actual benefit to the coal industry.
- The consensus is that the ruling might force the EPA to be less aggressive about its efforts to cut pollution but will not help coal overcome competition from gas and alternative energy; also, the oversupply of natural gas likely will continue to depress the price of gas and reduce coal sales.
- The ruling could prove too late to provide a reprieve for most of the utilities that already had spent the resources to retrofit or retire, Sterne Agee analysts say, but lower MATS compliance operating costs could help some PRB coal power plants compete more aggressively on the margin with gas-fired power plants.
- Citigroup notes the news has important implications for the Clean Power Plan proposal scheduled to be finalized mid-summer 2015, and views the ruling as a net positive for the U.S. thermal coal market and miners such as Peabody Energy (BTU -11.3%), Alliance Resource Partners (ARLP +1.5%),Alliance Holdings (AHGP -0.1%) and Foresight Energy (FELP +0.1%).
- Also: ACI -4.7%, ANR -6.9%, CLD -7%, WLB -2.9%, WLT -12.9%.
Jun. 29, 2015, 11:38 AM
- Coal stocks (KOL +0.3%) are rallying after the Supreme Court threw out the EPA’s first-ever rules requiring coal-fired power plants to cut emissions of mercury and other toxic air pollutants, saying the agency should have weighed the cost of compliance in deciding whether to regulate.
- The ruling means the EPA must go back to the drawing board, which possibly could push any new emissions rules past Pres. Obama’s time in office.
- Coal companies are enjoying hefty gains: WLT +28.2%, ACI +15.1%, BTU +11.2%, ANR +5.4%, CLD +5.2%, RNO +3.9%, WLB +1.9%, CNX +1.4%.
- Select utility names also are seeing some strength: AEP +1%, PCG +0.9%, D +0.6%, NEE +0.6%, EXC +0.3%.
Jun. 26, 2015, 11:38 AM
- Peabody Energy (BTU -10.2%) sees continued weakness, down ~10% so far today and 20% on the week, although all coal mining shares (KOL -1.5%) have been hammered in recent days.
- Moody's downgraded BTU's corporate credit rating last night to B3 from B2 with a negative outlook, reflecting the rating agency's expectation of a more precipitous deterioration in the company's credit metrics than previously forecast due to the ongoing decline in the seaborne met coal markets.
- The firm sees BTU's debt/EBITDA ratio approaching 9x in 2015 and leverage remaining elevated at ~7x in 2016; absent asset sales, BTU is seen generating negative free cash flows in 2015 and 2016.
- However, BTU and other coal names have been sliding all week; Barron's Ben Levisohn speculates investors may be worried about the pending Supreme Court decision - in light of the Court's "having tilted leftward in its rulings" this week - on whether EPA rules that caused utilities to shutter some coal-fired plans are legal.
- Related tickers: ACI, WLB, CLD, ANR, WLT, CNX, NRP.
Jun. 17, 2015, 7:17 PM
- Benchmark prices for metallurgical coal used in steelmaking have plunged an additional 15% from levels that had already hit a six-year low, as Japanese buyers reportedly are signing contracts that pay $93/metric ton, the lowest price since 2004.
- This summer’s price decline is so steep that it could force cutbacks around the world, even at mines that were profitable as recently as the spring, says Doyle Trading's Ted O’Brien, adding that more U.S. mines likely will be forced to close.
- Prices for both met and steam coals are not likely to recover substantially through at least 2016, putting U.S. miners in a position where they cannot avoid losing money, BB&T analyst Mark Levin says.
- Relevant tickers: KOL, BTU, WLB, CLD, ANR, ACI, WLT
Jun. 12, 2015, 3:11 PM
- Peabody Energy (BTU -8.1%) and Arch Coal (ACI -12.3%) plunge to all-time intraday lows amid concerns that they will have to pay more for insurance that covers environmental damage.
- "Investors don’t know how to handicap this self-bonding issue,” says Doyle Trading CEO Ted O’Brien. "Until the companies come out and give Wall Street certainty that they know how to deal with it, I think we’re going to be stuck in this vortex."
- Wyoming regulators have told Alpha Natural Resources (ANR -10.6%) that it no longer qualifies for a self-bonding program which allows coal producers to cheaply insure their clean-up costs in case of bankruptcy, and are reviewing financial data from BTU and ACI to see if they still qualify.
- Two other coal miners, Cloud Peak Energy (CLD -6.7%) and Walter Energy (WLT -8.2%), also have sunk to record intraday lows.
- ETF: KOL
Jun. 11, 2015, 12:12 PM
- Walter Energy (WLT +0.2%) says it will miss an interest payment and enter into a 30-day grace period starting June 15 on $19M due to holders of its 9.875% unsecured note maturing in December 2020.
- WLT’s plan to skip the coupon payment for now comes as it continues negotiations with senior creditors on a restructuring of its $3.1B debt load that could put it into bankruptcy as soon as this month.
- WLT used the grace period on its last interest payment due April 15, electing to pay holders of two notes on May 15.