Patriot Coal Corporation (fka PCXCQ)

[marayatano]

Patriot Coal disclosure expected this week

Bloomberg News



Patriot Coal's proposed reorganization plan, filed Friday, outlines a financing plan that includes a rights offering for creditors to buy new junior secured notes as well as shares of new common stock.

Unidentified creditors will backstop the rights offering by agreeing to purchase new notes and stock not taken by other creditors, according to the plan.

Specifics of the financing plan will be outlined in an explanatory disclosure statement the Creve Coeur-based company expects to file this week.

Holders of existing senior secured notes and convertible notes can participate in the rights offering if they are so- called accredited investors. If they are not accredited or elect not to purchase in the rights offering, they will be given some of the new notes and new common stock.

The plan has blanks where creditors later will be told the amounts of new notes and stock for various classes. The plan as yet doesn’t say how the new stock and new notes will be divided among creditors of the parent and Patriot’s subsidiaries.

General unsecured creditors are to receive new common stock. The plan has blanks where the percentage recoveries for all classes will be shown later.

As part of the new union labor contract approved in August by the bankruptcy court in St. Louis, a trust will be created to provide some health benefits for retirees. The plan shows the trust as receiving $3.75 million in cash or an as yet unspecified amount of new stock.

When the contract was being approved, Patriot said the trust would be funded with as much as 38 percent of the stock of reorganized Patriot. In addition, there was to be a profit-sharing formula and a per-ton royalty based on the amount of coal sold.

Patriot previously said there were talks with Knighthead Capital Management LLC and Aurelius Capital Management LP about a rights offering to supply some of the financing to emerge from bankruptcy.

Patriot is one of the largest coal producers in the U.S. It filed for Chapter 11 reorganization listing assets of $3.57 billion and debt of $3.07 billion as of May 2012. The bankruptcy was moved from New York to St. Louis in December.

Patriot’s $200 million in 3.25 percent senior convertible notes due 2013 last traded Sept. 6 for 11.1 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The convertible notes declined 13 percent in value from the day before the plan was filed and were down 23 percent since Nov. 13.

The $250 million in 8.25 percent senior unsecured notes due 2018 last traded Sept. 4 for 50.5 cents on the dollar, about the same as where they traded on Nov. 13, Trace reported.

http://www.stltoday.com/business/local/patriot-coal-disclosure-expected-this-week/article_37e44fed-b37d-59ea-8e65-f741562c62a9.html