In a society that is moving from coal to cheaper, natural gas, Patriot Coal has suffered. This coal producing and marketing company has spent its efforts and finances working towards a better end-goal, and they now believe that they will need comprehensive financial restructuring to get there. According to Reuters, the company arranged for $802 million in bankruptcy financing so that it won’t have to halt mining operations and customer shipments. The shares for this company fell 72 percent on Monday after Bloomberg News reported that they would most likely file in short order.
When interviewed, executives at Patriot admitted that they were hurt by the reduction of coal use in the USA. Now, consumers are following the trend for cheap, natural gas. Also, with a renewed focus on being green, the coal industry has become a commonly cited enemy. New environmental costs have spiked the company’s expenses and led to a loss in revenue. As well, the weaker international and domestic economies have taken a serious toll on their income. People naturally want to save, so they are often willing to bypass coal in favor of a cheaper fuel alternative.
The company has more than $1 billion in assets, as well as $1 billion in liabilities. Back in May, the company worked with its lenders and hired the Blackstone Group to help work on its finances. However, the move wasn’t enough to change their fate, and bankruptcy is now their only way out. While their stock may have suffered from the lack of finances and their declaration, the business may continue to blossom once they are debt free. This same concept is applicable for men and women who need to file for bankruptcy on a personal level. If you are in need of refinancing, and want to stop your creditors from calling and threatening you, then you need to contact a bankruptcy attorney and get started!