Martha SparksSociety Editor
July 10, 2012
One of the largest coal-producers in West Virginia announced Monday that it will reorganize under Chapter 11 bankruptcy.
Officials with the St. Louis-based company Patriot Coal Corp. said in a press release that mining operations and customer shipments will continue while Patriot undergoes “comprehensive financial restructuring.” Patriot has 10 mining operations in West Virginia, including large mines in Logan and Monongalia counties.
The company made the filing in New York and said it had more than $800 million in financing from banks that would help during the bankruptcy process.
Patriot Chairman and CEO Irl F. Engelhardt said the company’s outlook has been affected by reductions in demand, competition from natural gas and “challenging environmental regulations affecting the cost of producing and using coal.” The company also cited a weak international and domestic economy.
“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,” Engelhardt said in a statement. “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 previously reacted to the lower domestic demand by reducing production and increasing sales to export markets, the news release says. Company officials announced in February that the Big Mountain mining complex in Boone County would close.
That move came just days after Patriot announced it was idling five operations in south West Virginia which mine metallurgical coal.
Patriot’s stock dropped 72.1 percent Monday after Bloomberg News first reported the bankruptcy filing.