Patriot Coal Tries to Stop the Bleeding

Here’s what Patriot Coal Corp. (NYSE: PCX) had to say this afternoon about the $625 million term loan it couldn’t close last week:

Earlier this month,Patriot Coal Corporation (PCX) announced that it entered into a commitment letter for a new revolving credit facility and new term loan facility for a total of $625 million from Citigroup Global Markets, Inc., Barclays Bank PLC and Natixis, New York Branch. Patriot Coal Corporation 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. Patriot Coal Corporation has engaged The Blackstone Group and continues to work with Davis Polk & Wardwell LLP, its long-standing counsel, to achieve an optimal financing package.

We wrote earlier about a report that the company was seeking restructuring help. This release from Patriot Coal doesn’t deny that, rather choosing to answer a question that wasn’t asked. As for the $625 million in financing, the statement says nothing new about that either. The company announced that on May 8th when it released earnings. But is the commitment letter signed, sealed, and delivered? Doesn’t sound like it.

Patriot Coal shares hit a new 52-week low of $1.36, down -58% for recovering to -30% at $2.36 as this is written.

Paul Ausick