Mon, Aug. 3, 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.
Mon, Aug. 3, 9:12 AM
- Alpha Natural Resources (NYSE:ANR) confirms it has filed for Chapter 11 bankruptcy protection, in an effort to cut its more than $3B debt load.
- ANR says it has secured an 18-month debtor-in-possession financing package totaling up to ~$692M, arranged by Citigroup, and led by a group of both its first and second lien lenders.
- ANR chose to file for bankruptcy rather than repaying a convertible bond due at the start of this month, despite having $476M in cash as of March 31.
Thu, Jul. 30, 4:06 PM
- Alpha Natural Resources (NYSE:ANR) plans to file for Chapter 11 bankruptcy as soon as Monday, Bloomberg reports.
- ANR’s senior lenders including Citigroup and Davidson Kempner Capital Management reportedly plan to provide a loan to fund the company through bankruptcy.
- ANR would not repay $109M of 3.25% convertible notes by an Aug. 1 maturity date, according to the report.
Wed, Jul. 22, 11:34 AM
- J.P. Morgan finally gets around to downgrading Peabody Energy (BTU +11.7%), cutting its rating to Neutral from Overweight, two days after shares hit a 52-week low.
- After Arch Coal ([ACI]] +1.1%) and Alpha Natural’s (ANR +8.1%) share prices fell below $1, the spotlight fell on BTU, the firm explains, adding that the stock is vulnerable to squeezes, as 36% of BTU equity is now shorted; but in view of the firm's cautious commodity view on natural gas into year's end, it says it is "uncomfortable" with its Overweight rating on BTU.
- JPM says its coal Overweights are now restricted to Alliance Resource Partners (ARLP -1.9%) and Foresight Energy (FELP +2.1%).
Tue, Jul. 21, 3:14 PM
- Alarm bells are ringing for Joy Global (JOY -2.2%) and its ability to weather a capital spending slump among miners that include some of the company's biggest customers, J.P. Morgan analysts say.
- A combined 60% of JOY’s trailing 12-month sales were to North American and Latin American customers, many of which are coming under increasing financial pressure, which prompts the analysts to expect JOY’s earnings and balance sheet to come under pressure into FY 2016.
- JPM sees some of JOY's five biggest customers - ANR, SID, CLF, CMP and VALE - needing to further reduce capex, as well as push out receivables, off-load inventories to suppliers and in-source maintenance labor (~20% of JOY’s service business).
Mon, Jul. 20, 12:59 PM
- Alpha Natural Resources (ANR -21%) is downgraded to Neutral from Buy at Sterne Agee CRT - odd timing, since the coal miner has lost more than 85% of its value YTD and now trades at less than $0.10/share.
- While ANR indicated total liquidity of $1.8B as of March 31 and continues to explore options for capital structure improvement, the firm believes investor focus will shift toward distressed credit and legal news flow.
- The NYSE said last week that it will begin de-listing proceedings, and recent reports say ANR has entered into discussions with various parties regarding the potential of a bankruptcy filing.
Thu, Jul. 16, 10:27 AM
- The NYSE says it is delisting Alpha Natural Resources (NYSE:ANR), based on "abnormally low" price indications; shares are halted but were -37% premarket.
- WSJ reported yesterday that ANR was engaged in potential restructuring negotiations with senior lenders; Walter Energy filed Chapter 11 on the same day.
- Other coal companies are mostly higher in early trading: ACI -0.6%, BTU +1.3%, CLD +1.2%, WLB +2.1%.
Wed, Jul. 15, 5:26 PM
- Alpha Natural Resources (NYSE:ANR) is in talks to obtain financing for a potential bankruptcy filing early next month, WSJ reports.
- ANR reportedly is negotiating the terms of a $300M-$400M debtor-in-possession loan with its loan holders and senior bondholders,which would help see it through bankruptcy should it file for chapter 11 protection in early August, near the time some of its convertible bonds come due.
- ANR is still exploring options to improve its capital structure, and a bankruptcy filing is not inevitable, the report says.
- ANR -32.8% AH.
Tue, Jul. 14, 3:43 PM
- Challenging results should be expected across the spectrum of coal producers, including Peabody Energy (BTU -3.3%), Cloud Peak Energy (CLD -1.5%), Alpha Natural Resources (ANR +0.6%) and Arch Coal (ACI +5.1%), Cowen analysts maintain, seeing average Q2 EBITDA estimates for the group ~4% below consensus.
- Among the coal names, Cowen says it is farthest below consensus for ACI (13% below consensus) and ANR (27% below consensus); amid deteriorating financial conditions, self-bonding capacity has become a hot topic for these companies and will be at the forefront of Q2 earnings calls.
- Cowen considers Alliance Resource Partners (ARLP +0.2%) its top pick and believes the company's White Oak transaction solidifies distribution growth potential; the firm rates ARLP, ACI and Foresight Energy (FELP -2.3%) at Outperform, and Natural Resource Partners (NRP -1.3%) and Teck Resources (TCK -0.2%) at Market Perform.
Mon, Jul. 13, 12:49 PM
- For a real sense of coal's diminishing prospects (NYSEARCA:KOL), check out what is happening in the bond market, where three of the biggest U.S. coal producers had the worst-performing bonds for Q2: Alpha Natural Resources (NYSE:ANR) -70%, Peabody Energy (NYSE:BTU) -40%, Arch Coal (NYSE:ACI) -30%.
- Bonds are where coal companies traditionally turn to raise money for new mines and environmental cleanups, but investors are increasingly reluctant to lend to them, as coal bond prices tumbled 17% in Q2, Bloomberg reports.
- Even setting aside environmental and health issues, renewables are on a trajectory to outcompete fossil fuels, starting with coal; between now and 2040, two-thirds of the money spent on adding new electricity capacity worldwide will be spent on renewables, according to the analysis.
Mon, Jul. 13, 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,
Thu, Jul. 9, 5:56 PM
- J.P. Morgan's John Bridges sees “no near term positive catalysts" for beaten-down coal stocks such as Peabody Energy (NYSE:BTU), Alliance Resource Partners (NASDAQ:ARLP), Foresight Energy (NYSE:FELP) and Cloud Peak Energy (NYSE:CLD).
- The analyst notes that BTU has announced that it has overcome requests from Wyoming over self bonding of reclamation liabilities, but both Arch Coal (NYSE:ACI) and Alpha Natural Resources (NYSE:ANR) remain under review; BTU, ACI and ANR "appear to have ~24 months before the risk of a 'maturity wall' of expiring debt though equity values may imply some thoughts about proactive filing."
- Bridges lowers its stock price targets for BTU to $5 from $7, ARLP to $33 from $40, and FELP to $17 from $18, and CLD to $6.50 from $7.
Wed, Jul. 8, 4:56 PM
- Alpha Natural Resources (NYSE:ANR) says it has told nearly 300 employees at six mines and a processing plant in southwest Virginia and eastern Kentucky that it expects to idle the facilities in anticipation of their potential sale.
- The affected operations are Mill Branch's Dorchester and Osaka deep mines; North Fork Coal's North Fork No. 6 deep mine, and its already idled Panther No. 1, Stillhouse No. 1 and North Fork No. 7 mines; and Pigeon Creek's Plant No. 1.
Wed, Jul. 1, 4:45 PM
- Alpha Natural Resources (NYSE:ANR) says its Pennsylvania Services Corp. subsidiary has acquired the 50% interest in its Pennsylvania Land Resources natural gas exploration and production joint venture it did not already own for $126M, making PSC the sole owner and operator of the venture.
- ANR says the deal allows it to expand and control an economic natural gas development program composed of 25K-plus net acres and associated infrastructure in the Marcellus Shale.
- ANR says PSC expects drilling on the first pad to begin in the next 30 days, with an estimated four wells completed by Q1 2016.
Tue, Jun. 30, 1:50 PM
- Alpha Natural Resources' (ANR -3.2%) creditors have hired advisers to prepare for possible restructuring talks ahead of an August debt payment, WSJ reports.
- Creditors reportedly expect restructuring talks to heat up ahead of the Aug. 1 repayment deadline for some of ANR’s convertible bonds; the company has been buying back the notes, but $109M worth remained outstanding as of March 31.
Tue, Jun. 30, 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%.
ANR vs. ETF Alternatives
Alpha Natural Resources Inc along with its subsidiaries is engaged in extracting, processing and marketing steam and metallurgical coal from surface and deep mines, and sells it to electric utilities, steel and coke producers, and industrial customers.
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