US coal miner Peabody’s share price fell to an all-time low on Friday, after the St Louis-based company announced the previous day that it was terminating a cash tender offer to buy back $1-billion in debt.
The company on Thursday terminated its cash tender offers, noting that, “at this particular time, debt markets do not accommodate a path towards completing the offers and achieving the company’s refinancing objectives in an economic fashion”.
Peabody’s stock fell to a low of $15.32 a share on Friday, compared with the $42-a-share market that it traded at a year ago.
“Peabody set out several weeks ago evaluating an opportunistic refinancing with some key requirements and a robust set of objectives," CFO Amy Schwetz said in a statement on Thursday.
"We were successful in upsizing and extending our revolver and obtaining needed amendments to the credit facility, as a necessary step to enable our pending joint venture (JV) with Arch Coal.”
Peabody upsized its revolving credit facility with additional commitments of $215-million and extended the maturity date for $540-million of the facility to 2023. Further, the credit facility was amended to permit the Power River Basin (PRB)/Colorado JV.
Peabody issued statement on Friday confirming its commitment to the PRB/Colorado JV with Arch Coal, stating that it continued to progress through the regulatory approval process.
In June last year, Peabody and Arch announced that they would combine their PRB and Colorado assets in what they describe as a “highly synergistic” JV aimed at strengthening the competitiveness of coal against natural gas and renewables.
Peabody CEO Glenn Kellow described the JV as an “extraordinary example of industrial logic”.
The JV was expected to unlock synergies with a pretax net present value of about $820-million, the NYSE-listed miners said, stating that the average JV synergies were projected to be about $120-million a year over the initial ten years.
Among other assets, the JV would combine two productive and adjacent US coal mines – Peabody's North Antelope Rochelle Mine and Arch's Black Thunder mine, which share a property line of more than seven miles – into a single, lower-cost complex.
Arch Coal’s shares traded 5.33% lower in New York on Friday at $71.94 apiece.