Alpha Natural: First Priority With Cash Is Expanding Company
07 May 2009 - 2:17AM
Dow Jones News
Coal company Alpha Natural Resources Inc. (ANR) said Wednesday
it's interested in acquisition opportunities throughout the U.S.
and aboard amid strong cash reserves.
Company executives during a conference call with analysts said
prices for assets have come down, making it a favorable market.
Several of the U.S.'s largest coal companies have made similar
comments, seeing growing opportunities for mergers and acquisitions
amid a slide in coal prices and slump in demand.
Alpha Natural sees the best opportunities for cost-savings deals
near its operation in the Eastern U.S., but sees benefits longer
term in expanding its geographic footprint.
If the company is unable to settle on opportunities as the year
goes on, executives said they would consider other options,
including buying back shares or paying down debt.
Analysts see Alpha Natural becoming involved in merger and
acquisition activity as it boasts a strong liquidity position. The
company said Wednesday at the end of the quarter it had $693
million in cash and cash equivalents and $521 million in long-term
debt.
At the same time, Alpha Natural said it continues to cut costs
amid weak market conditions. It has cut overtime, furloughed
workers and will extend the Independence Day holiday at select
mines. It also is working to recoup the value of sale contracts for
coal used in steel production, taking legal steps and turning to
arbitration.
Alpha Natural posted a bigger-than-expected 60% jump in
first-quarter profit Wednesday on wider margins and lower
costs.
Shares of the company recently traded up 16% to $29.30.
-By Mark Peters, Dow Jones Newswires; 201-938-4604;
mark.peters@dowjones.com