Patriot Coal Plunges On Report Of Bankruptcy Advisor Pitch

Tyler Durden's picture

Wondering why PCX is plummeting, and slowly taking the entire energy complex lower? It is due to the following report from DebtWire as of last night, and reposted this morning.

Patriot Coal on Friday fielded informal pitches from restructuring advisors, said three sources familiar with the matter. The distressed coal miner aims to retain the professionals in the even the company can't satisfy its near-term financing needs.


Centerview Partners and Blackstone were among the shops that presented at the beauty pageant, which was organized by law firm Davis Polk on Patriot's behalf, two of the sources specified.


Patriot has been garnering significant market attention recently due to its cash-burn trend and difficult raising new capital. The company had to delay launching a USD 625m refinancing deal for syndication last week after it disclosed a potential contract cancellation with a key customer.

Sorry PCX - better luck next time. We have two words of advise for you: Chesapeake... and TBTF. If your balance sheet was a horrible tangled morass of countless HY bonds, the creditors would have no choice but to refi (probably via Jefco and Goldman). Alas, you are on your own now.

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fightthepower's picture

Seriously, this is causes by the massive glut of natural gas.

El Viejo's picture

Maybe, there are plans to convert a coal plant near me to gas.

NewThor's picture

I hope this company is in JPMorgan's CDS index.

The Big Ching-aso's picture



I hear ya man.   My mother-in-law is finally seeing a good gastroenterologist.

RoadKill's picture

No - this was caused by too much debt and an uncompetitive cost structure.  If this was because of a glut of nat gas - then all coal and nat gas companies would be bankrupt.  CNX, BTU, ANR, CHK, UPL, SWN, ECA - they are hurting - but not bankrupt...

FlyoverCountrySchmuck's picture

Seriously, this is caused by OBAMA EPA REGULATIONS destroying coal usage in America.
Did the Obama-supporting MORONS at the United Mine Workers think Obama was lying when he said anyone could still use coal if they wanted to, but he was going to bankrupt them?


slaughterer's picture

Kyle Bass has a new holding in a competitor of Patriot Coal: Peabody Energy (BTU)

Boston's picture

Same here. I'm buying BTU's debt and equity. The more losers like PCX get taken out, the better for the remaining players.

slaughterer's picture

PCX is pissed at the rumor-mongers.  Late PCX shorts getting crushed to death right now. 


ST. LOUIS, May 22, 2012 /PRNewswire via COMTEX/ -- Earlier this month, Patriot Coal Corporation PCX -44.35%announced that it entered into a commitment letter for a new revolving credit facility and new term loan facility for a total of $625 million from Citigroup Global Markets, Inc., Barclays Bank PLC and Natixis, New York Branch. Patriot Coal Corporation is continuing to work with these lenders to strengthen its finances, including the replacement of its current credit facilities well before certain of its debt obligations become due in March 2013. Patriot Coal Corporation has engaged The Blackstone Group and continues to work with Davis Polk & Wardwell LLP, its long-standing counsel, to achieve an optimal financing package.

Buck Johnson's picture

Why is this so noteworthy?  If you could explain it would help a little.

becky quick and her beautiful mouth's picture

didn't obama talk about wanting to bankrupt coal companies?

ihedgemyhedges's picture

Becky, get back to pumping the home sales news will ya??????????????? That's all you see on bloomberg,, etc etc.


PS Richmond Fed came in at 4 on expectations of 11.  You may now continue your pumping.

Paul Atreides's picture

The only recovery I've seen in the last 4 years is after a night of heavy drinking...

MM76mm's picture

That may be the post of the day!

john39's picture

so we all can be forced to buy wind and solar energy at 4x the price of what coal energy should cost, but for government bullshit.

Cruel Aid's picture

Not a good plan, but it is the plan.

El Viejo's picture

Mild Winter/Summer???

Mitch Comestein's picture

Just one in severl coal and nat. gas companies that will be going the way of the dodo, or myspace.

It is amazing that people on websites tout these companies as great when they are leverage to the hilt.  The current ratio was less than 1.  For some of you non-accountants that is bad.  BTW, ATT has a current ratio below 1.  Lot's of companies do.  It is just a matter of time....timber.

Bastiat's picture

They'd be doing much better if the nuke plants were shut down -- or even made to book the future cost of waste disposal and risk (as it is being redefined by Fukushima).

neidermeyer's picture

Waste disposal is a non-event for nuclear power ,, or it should be ... the only reason waste is stored instead of reprocessed in fast-breeder reactors is because of the environmentalists ... they are the reason fuel is stacking up... plants don't want to store it... any environmental damage from Fukushima is due to the environmentalists that short circuited the planned fuel reprocessing plans back in the 1970's ... for 40 years they have insisted on on-site storage by blocking all available options , including what they originally championed , storage in a stable old mine (does Yucca Mountain sound familiar?). Bowing and scraping at the altar of "getting along" with these enviro-wackjobs is killing us all ...

hugovanderbubble's picture

Excuses ...


Recession is close to us...



francis_sawyer's picture


The merciless 'paper shorting' of PM's over the recent past isn't the only game in town... It is being done systematically with:

- Housing bubble

- Recently Nat Gas

- Coal (as in this example)


The banker scum will stop at nothing to apply pressure to EVERY critical industry (using counterfeitted dollars), as they move in to try and take everything over for pennies on the dollar... The ultimate goal is total control over all the critical resources for when fiat explodes...

While they have idiot Hollywood liberals stirring up useless global warming debates, they're moving behind the scenes to corner the market on fossil fuels...

john39's picture

can't wait until we all get to play hunger games every year...   Agenda 21 is going to save the planet (for the bankers).  /sarc off.

lolmao500's picture

Someone start these reports on JP Morgan...

Matt's picture

Looks like that was one amazing one-year short position. Sell at $24 buyback at $2.40. Too bad I missed it ...

Sutton's picture

Just put all of the liabilities and cash bleeding entities into  an OFF Balance Sheet vehicle.

It works in New York, why not West Virginnie.

Catullus's picture

Merchant Gen is getting killed too. Lots of restructuring needs to happen all over the power space

Levadiakos's picture

Cramer pumping EOG

Doubleguns's picture

Thank God I sold when oil margin was raised.

oddjob's picture

It figures you watch that crap.

Jeremy Roenick's picture

The bogeyman is gonna get 'em.

Azwethinkweiz's picture

I'll admit it: I lost 54% of my portofolio thus far in 2012 on coal bets. I never thought the .gov would go this far in killing the industry and I gambled on Mr. Crony Capitalist (Warren Buffett) placing railroad all across the US to move the stuff.

Strange how companies which produce products necessary to our functioning in a modern society are down almost 60% for the year while companies which produce nothing but time-wasting applications are in the green.

Oh, the irony!


El Viejo's picture

+1 for honesty. Without it none of us learn.

RoadKill's picture

You were early!  Still are...

Nat Gas bottomed at $2.  It will rise to $3-$4 throughout the summer, but its not going to skyrocket this year.  If we have a moderate summer and storage starts looking full - we'll probably see $2 again in Sept / Oct - and then we'll have shortage's this winter.

I bought into BEST IN BREED Nat Gas producers when Gas broke under $2.  I'm talking guys with $1 all-in-costs.  UPL not CHK.

But even with gas fundamentals bottoming its too early to buy a coal company due to China.  China GDP growth will probably slow to 5% - with a SLIGHT negative bias.  If Europe blows up hard enough to drive the US into recession - then China COULD post negative GDP for a quarter - before they fast track $1 trillion of new, worthless construction.  So while the US thermal coal fundamentals will improve, the MET coal dynamics will continue to weaken.

Muppet Pimp's picture

Don't get me started....Multiple contraction is a bitch.

FlyoverCountrySchmuck's picture

Did you think Obama was LYING about destroying the coal industry???

ALWAYS look at what a Radical Socialist DOES, not what they SAY.

CPL's picture

Welcome aboard /b/rother!


Grab something to drink from the fridge, we're going sit back a distance and watch it burn together.


Patriot Coal however is also a major supplier of coal, with credit facilities in complete disarray it means lots of power plants everywhere are going offline forever worldwide.  This does not bode well for India, Brazil, China or Pakistan.


I would add Philippines and all of South East Asia in that.  So prepare for an abrupt breaking action across the world.  Get gold/silver...make sure you've got food.

RoadKill's picture

I read this as Portugal rather then Patriot Coal!  One can always hope!

alien-IQ's picture

Monkey-hammered and tossed off the cliff.


I should be working's picture

Actually I don't really care if some penny coal stock just fell off a cliff, but thanks for asking...

otto skorzeny's picture

why don't you go try to catch a spinning wind turbine blade-with your teeth

chistletoe's picture

Patriot coal used to display the information that they own the mineral rights to 1.6 billion tons of proven reserves.

Yes, Billion.

The company actually was spun off by Peabody in 2006 ... which was trying to get out from under several long-term

very unfavorable contracts, but it was given enough land and reserves to have a fighting chance for survival.

The assets used to be listed for the prices actually paid for them, pennies per acre, but if some of them are sold off,

they could fetch many times more than what the Wall Street analysts are expecting.  In fact, Consol Energy management,

sitting on a pile of cash, is no doubt calculating even now what to do ....


anyone with a little cash to gamble could make a killing here ....

otto skorzeny's picture

killing on which one?consol?

chistletoe's picture

um, if you had bought Patriot at the moment I posted that post,

you would have just doubled your money .... in 24 minutes ....

walküre's picture

China is FAILING .. and why are we even entertaining Keystone XL and moving heavy bitumen from Canada to the Pacific and to TX?

It's a racket. The current Canadian government has their hands in these deals and the only reason they're pushing so hard for the deals is their personal portfolio and inside deals. Are Canadians so stupid that they can't put one and one together?

There's a glut of energy out there and yet, they're pretending that if it wasn't for the heavy bitumen the world would come to complete still stand. No difference between government A pumping wind and solar bullshit and government B pumping tar sands. ABSOLUTELY NO DIFFERENCE.

What Obama's solar darlings are Harper's tar sand lovers.