Patriot Coal Corporation (fka PCXCQ)

[marayatano]

Patriot in Talks With Investors to Provide Exit Funding
By Tiffany Kary - Jun 19, 2013 7:31 AM PT


Patriot Coal Corp. (PCXCQ) is in talks with Aurelius Capital Management LP and Knighthead Capital Management LLC over a potential investment of “hundreds of millions of dollars” that would help fund its reorganization, and seeks court permission to pay them fees.

Patriot is negotiating with the two investors, who may participate in a rights offering that could serve as the basis for an exit from its Chapter 11 case, the bankrupt mining company said in court papers filed in bankruptcy court in St. Louis yesterday. Patriot recently won court permission to change its agreements with unionized workers, and is still trying to reach a consensus on how to do so, Patriot also said.

The potential investment “if consummated, will involve Knighthead and Aurelius providing and/or backstopping hundreds of millions of dollars of financing for the debtors’ estates,” lawyers for the company wrote.

The company, based in St. Louis, filed for bankruptcy in July, citing falling coal demand and $1.6 billion in lifetime health-care obligations for its retirees. On May 29, it won permission to reduce pensions and benefits to 13,000 unionized workers and retirees.
Union Demonstrators

The United Mine Workers of America has objected to the plan, and is protesting Patriot’s move to reduce benefits, even as Patriot says it is still attempting to reach an agreement with the union. On June 17, thousands of protesters demonstrated in front of Patriot’s parent company, Peabody Energy Corp. (BTU), according to the UMWA.

The UMWA has contended that Patriot hasn’t been quick enough to take action against Peabody, which profited by spinning off Patriot in 2007, giving it 16 percent of its assets and 40 percent of its retiree liability.

Knighthead holds $57.4 million of Patriot’s 8.25 percent senior notes due 2018, or 23 percent of them, and Aurelius owns $77.9 million of the same notes, or 31 percent of them, according to court papers. Aurelius also owns $19.7 million of Patriot’s 3.25 percent senior notes due 2013, or 10 percent of the total amount, according to court papers.

The case In re Patriot Coal Corp., 12-51502, U.S. Bankruptcy Court, Eastern District of Missouri (St. Louis).

To contact the reporter on this story: Tiffany Kary in New York at [e-mail]

To contact the editor responsible for this story: John Pickering at [e-mail]

http://www.bloomberg.com/news/2013-06-19/patriot-in-talks-with-investors-to-provide-exit-funding.html


If the Union was expected to get 35% of NEW EQUITY, who is the OTHER NEW EQUITY comprised of . . .




imo