Patriot Coal Announces Proposed Private Offering of Convertible Senior Notes

ST. LOUIS, May 20 /PRNewswire-FirstCall/ -- Patriot Coal Corporation
(NYSE: PCX) today announced its intention to offer $175 million in aggregate
principal amount of convertible senior notes due 2013 (the "notes"), subject
to market and other conditions. Patriot also expects to grant the initial
purchasers of the notes a 30-day over-allotment option, beginning on and
including the pricing date, to purchase up to $25 million additional aggregate
principal amount of the notes. The notes will be convertible into cash and,
if applicable, shares of Patriot's common stock based on a conversion rate to
be determined. The interest rate, conversion price and other terms of the
notes will be determined at the time of pricing of the offering.
Patriot intends to use the proceeds of the offering to reduce the
principal balance of the debt to be assumed in connection with its pending
acquisition of Magnum Coal Company, and the remainder, if any, for general
corporate purposes or to redeem the notes if the acquisition is not
consummated. The notes will be the company's senior unsecured obligations and
will rank equally with all of the company's existing and future senior debt
and senior to any of the company's future subordinated debt.
The notes and any shares of common stock issuable upon conversion of the
notes have not been registered under the Securities Act of 1933, as amended
(the "Securities Act") or any state securities laws. They will be offered
only to qualified institutional buyers pursuant to Rule 144A promulgated under
the Securities Act, and may not be offered or sold in the United States,
except pursuant to an exemption from the registration requirements of the
Securities Act and applicable state securities laws.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy these securities, nor shall there be any sale
of these securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under the
securities laws of any jurisdiction.
About Patriot Coal
Patriot Coal Corporation is a leading producer and marketer of coal in the
eastern United States, with ten company-operated mines and numerous
contractor-operated mines in Appalachia and the Illinois Basin. Patriot ships
to electric utilities, industrial users and metallurgical coal customers, and
controls approximately 1.3 billion tons of proven and probable coal reserves.
Patriot's common stock trades on the New York Stock Exchange under the symbol
PCX.
Important Information for Stockholders
The Company has filed a Registration Statement on Form S-4 (the
"Registration Statement") with the Securities and Exchange Commission (the
"SEC") in connection with the proposed issuance of Company common stock in the
transaction with Magnum Coal Company ("Magnum") that includes a preliminary
proxy statement/prospectus. The Registration statement has not yet become
effective. Investors and stockholders are urged to read the final proxy
statement/prospectus when it becomes available and any other relevant
documents filed with the SEC because they will contain important information
about the proposed issuance. Investors and stockholders may obtain these
documents free of charge at the website maintained by the SEC at
http://www.sec.gov. In addition, documents filed with the SEC by the Company
are available free of charge by contacting investor relations by phone at
314-275-3680, in writing to Janine A. Orf, Director of Investor Relations, or
by email to jorf@patriotcoal.com. The final proxy statement/prospectus will
be mailed to stockholders.
This communication shall not constitute an offer to sell or the
solicitation of an offer to buy securities, nor shall there be any sale of
securities in any jurisdiction in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws
of such jurisdiction.
The Company, Magnum and certain of their respective directors, executive
officers and other members of management and employees may be deemed to be
participants in the solicitation of proxies from the stockholders of the
Company in connection with the proposed issuance. Information about the
Company's directors and executive officers is set forth in the Company's
Annual Report on Form 10-K for the year ended December 31, 2007 filed with the
SEC on March 14, 2008 and in the proxy statement for the Company's 2008 annual
meeting of stockholders filed by the Company with the SEC on April 7, 2008.
Additional information regarding the potential participants in the proxy
solicitation and information regarding the interests of such potential
participants will be included in the final proxy statement/prospectus and the
other relevant documents filed with the SEC when they become available.
Forward Looking Statements
Certain statements in this press release, including statements regarding
the proposed offering, note terms, use of proceeds and acquisition, are
forward-looking as defined in the Private Securities Litigation Reform Act of
1995. These statements involve certain risks and uncertainties that may be
beyond our control and may cause actual future results to differ materially
from expectations. Factors that could affect Patriot's results include, but
are not limited to: the effect of market conditions on the proposed offering,
failure to obtain Patriot stockholder approval of the proposed issuance of
Patriot common stock in connection with the acquisition of Magnum; failure to
obtain, delays in obtaining or adverse conditions contained in any required
regulatory or other approvals in connection with such acquisition;
availability and cost of financing; failure to consummate or delay in
consummating the acquisition for other reasons; changes in laws or
regulations; changes in general economic conditions, including coal and power
market conditions; the outcome of commercial negotiations involving sales
contracts or other transactions; Patriot's dependence on Peabody Energy
Corporation in the near future; geologic, equipment and operational risks
associated with mining; supplier and contract miner performance and the
availability and cost of key equipment and commodities; Patriot's ability to
replace coal reserves; labor availability and relations; availability and
costs of transportation; weather patterns affecting energy demand; legislative
and regulatory developments; risks associated with environmental laws and
compliance; the outcome of pending or future litigation; and the availability
and costs of competing energy resources. Patriot undertakes no obligation
(and expressly disclaims any such obligation) to publicly update or revise any
forward-looking statement, whether as a result of new information, future
events or otherwise. For additional information concerning factors that could
cause actual results to materially differ from those projected herein, please
refer to the Company's Form 10-K, Form 10-Q and 8-K reports.
SOURCE Patriot Coal Corporation

Janine Orf of Patriot Coal Corporation, +1-314-275-3680