Alpha Natural Resources has announced on Thursday that it has started delisting procedures from the New York Stock Exchange. This comes as the mining and metallurgy company’s stock prices have hit almost rock bottom, selling for $0.24 on Thursday and $0.23 on Friday, closing in on its 52-week low of $0.20.
The Bristol, Virginia company has been hard hit by a decline in natural gas prices and other factors, such as facing stiff competition in the Appalachian coal area – where it has its primary operations. This provoked more than 800 lay-offs at the company earlier this year, which is desperately trying to avoid the fate of rival company Patriot Coal, which declared for its second bankruptcy in free years in May.
According to the Wall Street Journal, Alpha Natural Resources are looking to secure some kind of financing as a back-up plan in case of bankruptcy and the following restructuring process. Analysts are torn on whether the company will eventually fill for bankruptcy or not, but the scenario is considered as plausible.
The company’s latest earnings data release showed during Q2 2015, it earned $0.79 per share, slightly higher than the analysts’ consensus estimate, but it also made only $800 million in revenue compared to the projected $860 million. This marked a 24.3 percent decrease in revenue compared to Q2 2014.
Alpha Natural Resources’ debt issue also fell on Friday by 3.8 percent compared to its face value, trading now at only $2.25. This is massive decrease since last Friday, when ANR debt issues were trading at nearly $7.
The company’s woes have also made its analyst ratings history ambiguous in the last couple of months. Zacks downgraded its shares from a hold to a sell rating at the beginning of the month. Previously, Goldman Sachs had done the exact opposite on the 1st of June, upgrading them from sell to neutral and setting a $0.70 price target. At the moment, eight analysis firms are rating Alpha Natural Resources as “sell” while four are rating as “hold”. The average price target of shares set by investment analysts is $2.37.
Alpha Natural Resources operates 81 mines and 25 coal preparation plants throughout the Powder River Basin and Northern/Central Appalachia, operating in two segments there. In 2014, it received a $27.5 million fine from the U.S. Environmental Protection Agency for its illegal toxic discharges into Appalachian waterways, marking the largest environmental fine ever issued against a coal company by the EPA.
Image Source: Bloomberg