Patriot Coal files for bankruptcy
Patriot Coal, a St. Louis-based coal company, has filed for federal bankruptcy protection.
Coal companies have been hit hard by a decline in demand, arising in part from competition from cheap natural gas and a weaker economy. They have also blamed tougher environmental rules for rising costs.
All of these factors eroded Patriot’s financial health, the company argued. It has lost money every year since 2010, reporting a $198.5 million loss in the year that ended March 31.
“The coal industry is undergoing a major transformation and Patriot’s existing capital structure prevents it from making the necessary adjustments to achieve long-term success,” Irl F. Engelhardt, Patriot’s chairman and chief executive, said in a statement. “Our objective is to use the reorganization process to address important issues in an orderly way and make the company stronger and more competitive.”
Earlier this year, the company laid off 1,000 employees in an attempt to cut costs. The company has secured $802 million in financing to keep it afloat during the bankruptcy process, while continuing to provide salaries and benefits to employees.