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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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Tue, 05/22/2012 - 12:06 | 2451267 fightthepower
fightthepower's picture

Fuck you Bernanke!

Tue, 05/22/2012 - 12:07 | 2451275 fightthepower
fightthepower's picture

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

Tue, 05/22/2012 - 12:09 | 2451282 El Viejo
El Viejo's picture

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

Tue, 05/22/2012 - 12:16 | 2451308 NewThor
NewThor's picture

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

Tue, 05/22/2012 - 12:12 | 2451300 The Big Ching-aso
The Big Ching-aso's picture



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

Tue, 05/22/2012 - 13:08 | 2451525 RoadKill
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...

Tue, 05/22/2012 - 13:29 | 2451602 FlyoverCountryS...
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?


Tue, 05/22/2012 - 12:25 | 2451342 slaughterer
slaughterer's picture

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

Tue, 05/22/2012 - 13:07 | 2451516 Boston
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.

Tue, 05/22/2012 - 14:15 | 2451794 slaughterer
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.

Tue, 05/22/2012 - 18:52 | 2453142 Buck Johnson
Buck Johnson's picture

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

Tue, 05/22/2012 - 12:07 | 2451274 becky quick and...
becky quick and her beautiful mouth's picture

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

Tue, 05/22/2012 - 12:10 | 2451283 ihedgemyhedges
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.

Tue, 05/22/2012 - 12:26 | 2451299 Paul Atreides
Paul Atreides's picture

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

Tue, 05/22/2012 - 12:50 | 2451453 MM76mm
MM76mm's picture

That may be the post of the day!

Tue, 05/22/2012 - 12:10 | 2451292 john39
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.

Tue, 05/22/2012 - 13:08 | 2451518 Cruel Aid
Cruel Aid's picture

Not a good plan, but it is the plan.

Tue, 05/22/2012 - 12:21 | 2451333 neidermeyer
neidermeyer's picture


Obama's Promise the Bankrupt the Coal Industry

Tue, 05/22/2012 - 12:07 | 2451276 El Viejo
El Viejo's picture

Mild Winter/Summer???

Tue, 05/22/2012 - 12:09 | 2451286 l1b3rty
l1b3rty's picture

Sweet Agenda 21!

Tue, 05/22/2012 - 12:13 | 2451302 taketheredpill
taketheredpill's picture


Tue, 05/22/2012 - 12:18 | 2451320 Mitch Comestein
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.

Tue, 05/22/2012 - 12:27 | 2451350 Bastiat
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).

Tue, 05/22/2012 - 12:49 | 2451451 neidermeyer
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 ...

Tue, 05/22/2012 - 12:19 | 2451321 hugovanderbubble
hugovanderbubble's picture

Excuses ...


Recession is close to us...



Tue, 05/22/2012 - 12:21 | 2451322 francis_sawyer
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...

Tue, 05/22/2012 - 12:23 | 2451338 john39
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.

Tue, 05/22/2012 - 12:22 | 2451335 lolmao500
lolmao500's picture

Someone start these reports on JP Morgan...

Tue, 05/22/2012 - 12:28 | 2451357 Matt
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 ...

Tue, 05/22/2012 - 12:28 | 2451358 Sutton
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.

Tue, 05/22/2012 - 12:30 | 2451368 Catullus
Catullus's picture

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

Tue, 05/22/2012 - 12:34 | 2451387 Levadiakos
Levadiakos's picture

Cramer pumping EOG

Tue, 05/22/2012 - 12:51 | 2451461 Doubleguns
Doubleguns's picture

Thank God I sold when oil margin was raised.

Tue, 05/22/2012 - 12:59 | 2451494 oddjob
oddjob's picture

It figures you watch that crap.

Tue, 05/22/2012 - 12:41 | 2451416 Jeremy Roenick
Jeremy Roenick's picture

The bogeyman is gonna get 'em.

Tue, 05/22/2012 - 12:54 | 2451473 Azwethinkweiz
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!


Tue, 05/22/2012 - 13:07 | 2451517 El Viejo
El Viejo's picture

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

Tue, 05/22/2012 - 13:18 | 2451561 RoadKill
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.

Tue, 05/22/2012 - 13:22 | 2451574 Muppet Pimp
Muppet Pimp's picture

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

Tue, 05/22/2012 - 13:35 | 2451616 FlyoverCountryS...
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.

Tue, 05/22/2012 - 13:39 | 2451629 CPL
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.

Tue, 05/22/2012 - 13:10 | 2451535 RoadKill
RoadKill's picture

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

Tue, 05/22/2012 - 13:24 | 2451583 alien-IQ
alien-IQ's picture

Monkey-hammered and tossed off the cliff.


Tue, 05/22/2012 - 13:29 | 2451601 I should be working
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...

Tue, 05/22/2012 - 14:11 | 2451767 otto skorzeny
otto skorzeny's picture

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

Tue, 05/22/2012 - 13:57 | 2451661 chistletoe
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 ....

Tue, 05/22/2012 - 14:00 | 2451711 otto skorzeny
otto skorzeny's picture

killing on which one?consol?

Tue, 05/22/2012 - 14:25 | 2451839 chistletoe
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 ....

Tue, 05/22/2012 - 13:56 | 2451666 walküre
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.

Tue, 05/22/2012 - 14:00 | 2451712 chistletoe
chistletoe's picture


in response to Obama's blocking the Keystone pipeline, the Canadian government has okay'ed reversing

a Canadian east-west pipeline so that the oil from Alberta can be refined by canadians instead of Texans

and then sold to Europeans instead of Americans, at Brent prices instead of WTI ....


How stupid do you think they are?

Tue, 05/22/2012 - 14:20 | 2451817 walküre
walküre's picture

Where is this refinery going to be in Canada? Their problem is that they don't have enough refineries and need to import distillates back into Canada. Big refinery near Montreal was gutted last year because it was too expensive to upgrade.

Are they converting an existing plant to handle the heavy crude?

Tue, 05/22/2012 - 14:38 | 2451905 chistletoe
chistletoe's picture

ask Enbridge.... I suspect they know what they are doing ....

Tue, 05/22/2012 - 15:11 | 2452123 walküre
walküre's picture

Enbridge expands their pipelines. The article just mentions "Eastern refineries" and I suspect they're referring to plants located in the US on the Eastern Seaboard rather than in Canada's East.

Tue, 05/22/2012 - 13:59 | 2451703 otto skorzeny
otto skorzeny's picture

glad I didn't load up on KOL last week . Who the F is running up NG in the last month?and why? it jumped 3.5% at 9 am today

Tue, 05/22/2012 - 14:14 | 2451785 walküre
walküre's picture

Japan is going off nuclear. Are they converting to NG?

Tue, 05/22/2012 - 14:30 | 2451848 malikai
malikai's picture

Kyle Bass sends his regards.

Tue, 05/22/2012 - 14:49 | 2451826 earleflorida
earleflorida's picture

Paging Coal Porter... ???

"Royal Dutch Shell plc' [et.el.?] in CNG & LNG LandSea-CrabGrab?" --- #1 by Sea / #2 by Land?"

Samsung building largest floating 'Gas Refinery' - Six Times the weight of America's Largest Aircraft Carrier. [5/23/11] ___   Sorry bout Link :(

Try this if interesting in NatGas battle of the "Titan's" ___

Google OOPs your there. Must Read jmo

Texas - Louisiana- Oklahoma ___ WTI [?] --- 'Motiva Port Arthur refinery becomes U.S. Largest Shell'  [4/26/12]  {Ps. Who owns RDS.A?... here's a hint - it begins with an "R" Family}

thankyou tyler :-)) 

Fri, 05/25/2012 - 02:49 | 2461467 agagshoes
agagshoes's picture

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