ST. LOUIS, July 9, 2012 /PRNewswire/ -- Patriot Coal
Corporation (NYSE: PCX), a producer and marketer of coal products
in the eastern United States,
announced today that Patriot and substantially all of its wholly
owned subsidiaries have filed voluntary petitions for
reorganization under Chapter 11 of the Bankruptcy Code in the
Bankruptcy Court for the Southern District of New York.
Patriot has taken this action in order to undertake a comprehensive
financial restructuring. Patriot expects its mining
operations and customer shipments to continue in the ordinary
course throughout the reorganization process.
Patriot believes that the protection afforded by a
court-supervised reorganization process, including the ability to
access new financing, will provide the Company with additional time
and flexibility to address its financial challenges and position
Patriot for long-term viability and success.
In conjunction with its reorganization, Patriot has obtained a
commitment for $802 million in
debtor-in-possession (DIP) financing from Citigroup Global Markets
Inc., Barclays Bank PLC, and Merrill Lynch, Pierce, Fenner &
Smith Incorporated as joint lead arrangers. Upon approval by the
Bankruptcy Court, the new financing and cash generated from
Patriot's ongoing operations will be used to support the business
during the reorganization process.
"The coal industry is undergoing a major transformation and
Patriot's existing capital structure prevents it from making the
necessary adjustments to achieve long-term success," said Patriot
Chairman and Chief Executive Officer Irl F.
Engelhardt. "Our objective is to use the reorganization
process to address important issues in an orderly way and make the
Company stronger and more competitive."
Patriot President & Chief Operating Officer Bennett K. Hatfield added, "We remain firmly
committed to serving our customers and to being a good employer by
maintaining safe, productive operations as we undertake this
process. The skills of our employees and the quality of our service
provide an excellent platform for Patriot's future success. We
appreciate the ongoing dedication of our employees, whose hard work
is critical to our success and the future of our Company."
Patriot's business outlook has been impacted by a number of
challenges that are affecting the coal industry, including
reductions in U.S. thermal coal demand due to competition from low
priced natural gas, challenging environmental regulations affecting
the cost of producing and using coal, and weaker international and
domestic economies. The Company has reacted to the lower domestic
demand by reducing production and increasing sales to the export
markets. During recent months, the cancellation of customer
contracts, lower thermal coal prices and rising expenditures for
environmental and other liabilities have severely constrained the
Company's liquidity and financial flexibility.
Patriot has filed various motions with the Bankruptcy Court in
support of its reorganization, including requesting authorization
to continue paying employee wages and providing health care and
other benefits. Patriot has also asked for authority to continue
existing customer programs and intends to pay suppliers in full
under normal terms for goods and services provided after the filing
date of July 9, 2012.
Additional information is available on Patriot's website at
www.patriotcoal.com or by calling Patriot's Restructuring Hotline,
toll-free in the U.S., at 877-600-6531. (For calls originating
outside the U.S., please dial 1-336-542-5677.) Also, court filings
and other documents related to the reorganization proceedings are
available on a separate website administered by Patriot's claims
agent, the Garden City Group, at www.PatriotCaseInfo.com.
Davis Polk & Wardwell LLP is
serving as legal advisor, Blackstone Advisory Partners LP is
serving as financial advisor, and AP Services, LLC is providing
interim management services to Patriot in connection with the
reorganization. Ted Stenger, a
Managing Director at AlixPartners LLP, the parent company of AP
Services, has been named Chief Restructuring Officer of Patriot,
reporting to the Chairman and CEO.
About Patriot Coal
Patriot Coal Corporation is a producer and marketer of coal in
the eastern United States, with 12
active mining complexes in Appalachia and the Illinois Basin.
Patriot ships to domestic and international electricity generators,
industrial users and metallurgical coal customers, and controls
approximately 1.9 billion tons of proven and probable coal
reserves.
Forward-Looking Statements
Certain statements in this press release are forward-looking as
defined in the Private Securities Litigation Reform Act of
1995. These statements involve certain risks and
uncertainties that may be beyond our control and may cause our
actual future results to differ materially from our current
expectations both in connection with the Chapter 11 filings Patriot
is announcing today and our business and financial prospects.
Statements of management's expectations, including its desire to
successfully restructure in order to position Patriot for long term
viability and success, to address its financial challenges, to
address important issues in an orderly way and to make Patriot
stronger and more competitive are based on current assumptions and
expectations. No assurance can be made that these events will
come to fruition. We do not undertake to update our
forward-looking statements. Factors that could affect our
results include, but are not limited to: (i) the ability of Patriot
and its subsidiaries to continue as a going concern, (ii) the
ability of Patriot and its subsidiaries to obtain Bankruptcy Court
approval with respect to motions in the Chapter 11 cases, (iii) the
ability of Patriot and its subsidiaries to prosecute, develop and
consummate one or more plans of reorganization with respect to the
Chapter 11 cases, (iv) the effects of the bankruptcy filing on
Patriot and its subsidiaries and the interests of various
creditors, equity holders and other constituents, (v) Bankruptcy
Court rulings in the Chapter 11 cases and the outcome of the cases
in general, (vi) the length of time Patriot and its subsidiaries
will operate under the Chapter 11 cases, (vii) risks associated
with third-party motions in the Chapter 11 cases, which may
interfere with the ability of Patriot and its subsidiaries to
develop one or more plans of reorganization and consummate such
plans once they are developed, (viii) the potential adverse
effects of the Chapter 11 proceedings on Patriot's liquidity or
results of operations, (ix) the ability to execute Patriot's
business and restructuring plans, (x) increased legal costs
related to Patriot's bankruptcy filing and other litigation, and
(xi) the ability of Patriot and its subsidiaries to maintain
contracts that are critical to their operation, including to obtain
and maintain normal terms with their vendors, customers, landlords
and service providers and to retain key executives, managers and
employees. In the event that the risks disclosed in Patriot's
public filings and those discussed above cause results to differ
materially from those expressed in Patriot's forward-looking
statements, Patriot's business, financial condition, results of
operations or liquidity, and the interests of creditors, equity
holders and other constituents, could be materially adversely
affected. Patriot undertakes no obligation (and expressly
disclaims any such obligation) to publicly update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise. For additional information
concerning factors that could cause actual results to materially
differ from those projected herein, please refer to Patriot's Form
10-K and Form 10-Q reports.
INVESTOR CONTACT:
Janine Orf
(314) 275-3680
jorf@patriotcoal.com
MEDIA CONTACT:
Michael Freitag/Jonathan
Keehner/ Aaron Palash
Joele Frank, Wilkinson
Brimmer Katcher
(212) 355-4449
SOURCE Patriot Coal Corporation
