July 24 Shares of Walter Energy Inc fell
over 10 percent on Wednesday after the coal miner slashed its
dividend to 1 cent a share, from 12.5 cents a share, citing the
tough market for metallurgical coal and an amended credit
Walter, which in June pulled a planned credit refinancing,
said late on Tuesday that its $2.725 billion credit agreement
from April 2011 had been amended for the fifth time, suspending
some covenants and adding several others.
The company said this should give it more financial
flexibility. The amendment boosts interest rate margins by 1
percent, and makes it easier for Walter to issue more unsecured
debt, among other things.
Shares fell 10.5 percent to $12.62 in early trading on the
New York Stock Exchange.
Walter has operations in North America and the United
Kingdom, and much of its production is metallurgical coal, used
to make steel. As the steel market grapples with excess
capacity, global metallurgical coal prices have dropped,
weighing on miners.
Benchmark coking coal slid to $145 a tonne for the third
quarter, its lowest since 2009, from $172 in the second quarter,
according to Doyle Trading Consultants, which tracks the market.
Separately, Walter said it expects that when it reports
second quarter results, metallurgical coal sales will be about
2.4 million tonnes, and an inventory charge will boost costs
(Reporting by Allison Martell; Editing by Janet Guttsman and