Peabody Energy Corporation (BTU)

[LouisDesyjr]

No deals probable with the way things are

There is no reason for anyone to buy any coal properties outside of bankruptcy with the way things are. Any buyer that has the cash or already has financing, can just wait a few months for a bankruptcy and make the purchase for less than a regular sale.

While it would help things if the Bowie deal got done, it looks like it has been discussed for months and is not getting done. There was one comment in a recent seekingalpha.com article on BTU that mentioned one sale for a mine for only $20 million could not be completed; either the buyers didn't have the cash or couldn't get financing.

I don't expect any of these deals to get done unless the company is in bankruptcy. With sellers in dire need of cash, and buyers having no inventive to make the purchase, since then they will have a mine that is operating at a loss, there is no rush to buy.

I also expect that no one can get financing for an asset that is operating at a loss. What banker, in their right mind, would extend a loan on something that was losing money month after month? It would be a stupid loan.

Louis J. Desy Jr.