DOW JONES NEWSWIRES
Patriot Coal Corp. (PCX) said its refinancing plans are continuing and confirmed it is working with private-equity firm Blackstone Group LP (BX) on the effort.
The short statement came after a sharp and sudden selloff of Patriot's shares following a Debtwire report on the company's alleged plans to restructure.
Late Monday, Debtwire, citing unnamed sources, reported Patriot was fielding pitches from restructuring advisers in the event the company can't satisfy its near-term financing needs. Debtwire said Blackstone and Centerview Partners LLC were involved and law firm Davis Polk & Wardwell LLP was organizing the talks on Patriot's behalf.
Patriot said earlier this month it entered into a commitment letter for a new revolving credit facility and new term loan facility for $625 million from three lenders: Citigroup Inc. (C), Barclays PLC (BCS, BARC.LN) and Natixis (NTXFY, KN.FR).
"Patriot Coal Corp. 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," the company said.
It confirmed it is working with Davis Polk, its long-time counsel, and Blackstone "to achieve an optimal financing package," it said.
Following the Debtwire report, shares shed more than 50% of their value, but have now bounced back somewhat, triggering two single-stock circuit breakers as the stock recouped some losses in the wake of Patriot's statement. Shares were down 29% at $2.38 in Tuesday afternoon trading. The stock is down 72% so far this year.
The company last week 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.
-By Ben Fox Rubin, Dow Jones Newswires; 212-416-3108; firstname.lastname@example.org