| Could Arch Coal’s Debt Lead the Company to Bankruptcy? | |
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Will Arch Coal Succeed in Avoiding Bankruptcy? (Continued from Prior Part) Arch Coal’s debt
Most American coal producers are burning cash in the current weak coal market, which is affected by oversupply and weak demand. They’re building liquidity through various means to make sure they survive the downturn and avoid bankruptcy. This is especially true for highly leveraged players since they have limited abilities to issue new debt if they run out of resources.
Arch Coal (ACI) is one of these players. Arch Coal had around $5.1 billion of debt on its books as of June 30, 2015, almost steady since December 2015. But the company still has time on its side since there are no major maturing obligations until 2018. That year, it recorded $1.9 billion of debt matures, then $1.7 billion in 2019, $500 million in 2020, and $1.1 billion in 2021.
The real worry facing the company is its around $100 million in interest costs every quarter. If the debt exchange deal discussed in Part 1 goes through, ACI’s debt level will reduce to less than $4.0 billion, reducing interest costs too. Saving on interest costs would help the company conserve its available liquidity, hoping for coal prices to rise and cash flows to turn positive eventually. Covenants on Arch Coal’s debt mandate the company to maintain a certain level of liquidity.
Arch Coal’s liquidity position
Arch Coal’s cash balance dropped to $439.7 million as of June 30, 2015, from $734.2 million as of December 31, 2014. The cash position dropped due to continued cash losses and adverse movements in working capital. The company holds another $249.0 million in liquid securities. As of December 31, 2014, it had available liquidity of around $812.2 million.
For more analysis on coal (KOL) producers, including Peabody Energy (BTU), Cloud Peak Energy (CLD), and Consol Energy (CNX), visit Market Realist’s coal page.
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Arch Coal Inc
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PRODUCTEUR |
CODE : ACI |
ISIN : US0393801008 |
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ProfilIndicateurs de MarchéVALEUR : Projets & res.Communiqués de PresseRapport annuelRISQUE : Profile actifsContactez la cie |
Arch Coal est une société de production minière de charbon basée aux Etats-Unis D'Amerique. Arch Coal détient divers projets d'exploration en USA. Ses principaux projets en production sont WEST ELK, BLACK THUNDER et JACOB'S RANCH en USA et son principal projet en développement est SPRUCE N° 1 en USA. Arch Coal est cotée aux Etats-Unis D'Amerique et en Allemagne. Sa capitalisation boursière aujourd'hui est 366 000 US$ (317 981 €). La valeur de son action a atteint son plus haut niveau récent le 27 juin 2003 à 99,96 US$, et son plus bas niveau récent le 04 octobre 2018 à 0,01 US$. Arch Coal possède 36 600 000 actions en circulation. |