Patriot Coal, which in 2008 trading for close to $70 a share, is now trading for a $1.70 after it said it’s meeting with ‘advisers’ about restructuring if it can’t meet its near term debt requirements. Which more or less means that Patriot Coal might be going bankrupt. The stock (PCX) is down over 50% just today:
Patriot Coal Corp. (PCX) has fielded formal pitches from restructuring advisers in the event the company can’t satisfy its near-term financing needs, Debtwire reported.
The report, which cited three unnamed sources familiar with the matter, said the pitches involved Centerview Partners LLC and Blackstone Group L.P. (BX) and were organized by law firm Davis Polk & Wardwell LLP on Patriot’s behalf.
A Patriot representative wasn’t immediately available for comment.
Last week, Patriot lowered its sales volume outlook for metallurgical coal for the rest of the year, citing the potential default of a key customer. Two ratings firms soon after downgraded the company’s credit ratings.
Patriot’s already battered shares plummeted 29% in heavy trading to $2.39, dragging down a handful of coal producers’ stocks, as well. Arch Coal Inc. (ACI) slipped 8% to $7.10, while Alpha Natural Resources Inc. (ANR) slid 4.3% to $11.17 and Peabody Energy Corp. (BTU) fell 3.5% to $23.77. (WSJ)
However, if Patriot Coal is able to work out a deal look out for a huge short squeeze – the stock will scream higher as the shorts look to buy back shares.