NEW: Diving into Murray Energy's bankruptcy docs where we're getting a lot of information we usually can't see for the private coal producer.
One big thing: Business plan assumptions project HUGE drop in expected coal production and revenues through 2028: spglobal.com/marketintellig…
One big thing: Business plan assumptions project HUGE drop in expected coal production and revenues through 2028: spglobal.com/marketintellig…
Murray Energy is expecting 39.9% drop in coal volume by 2028 while revenue is expected to fall from $2.32B to just $1.34B in the same period.
It also plans to spend less at its mines: Murray forecast overall capital expenditures drops $245M in 2019 to $63M in 2028.
It also plans to spend less at its mines: Murray forecast overall capital expenditures drops $245M in 2019 to $63M in 2028.
Speaking of capital expenditures, I would probably be very concerned if I worked at a mine where the forecasted capital expenditure area in this table is blank or shrinking fast:
Also notable given CEO Bob Murray's vocal support of the Trump administration is that the company recorded $643M in adjusted earnings in 2016 and hasn't made any more than that since Trump became president:
Also, Bob Murray told me last year after his "investors are well-protected" after a distressed debt exchange and he walked back statements that Murray Energy would follow FirstEnergy Solutions into bankruptcy without the help of the Trump administration. But still:
Murray Energy took its bankruptcy financing plan to 24 parties including companies generally in business of bailing out companies that have to file for bankruptcy. They weren't interested: spglobal.com/marketintellig…
Murray Energy's assumptions it shopped to potential financiers also included assumed KEIP/KERP payments totaling $20 million. Those are basically incentives and retention payments generally handed out to executives to encourage them to stay. Also $111M for bankruptcy pros.
Murray Energy's business plan assumptions also reveal the company is making forecasts that contemplates shutting down the Colombian operations Murray bought in 2015 "September 2019 onward."
The bankruptcy filing even offers a peek into the finances of Javelin Global Commodities, which I have not seen before. Murray Energy owns 34% of the global commodities trading, logistics, operations and investment company:
Murray Energy CEO Bob Murray cheers on coal in his public appearances, but in presentation to potential sources of bankruptcy funding, Murray Energy noted average plant costs for solar and wind decreased 47% and 11% as market changed due to "both regulatory and market forces"
Here's a snapshot of the massive legacy liabilities Murray Energy has on its balance sheet. These are the sort of things a company is likely to try to leave behind in a bankruptcy reorganization:
