NEW YORK (The Deal) -- Coal miner Walter Energy (WLT) revealed in a conference call Thursday, Aug. 1, that it would look to generate $250 million from asset sales and joint venture opportunities in the next nine months, as low metallurgical coal prices continue to weigh on its earnings.
News of the asset sales coincided with the Birmingham, Ala.-based company's second quarter earnings, where the company reported a loss of $34.5 million for the quarter ended June 30, compared with earnings of $31.9 million in the same period in 2012. Revenue dropped 35% to $441.5 million.
Walter did not reveal exactly what assets are on the block, but CFO Bill Harvey hinted in an earnings call, that its U.K. assets as well as its Blue Creek mine in Alabama would be considered for either a sale or joint ventures offers. The company also has a number of non-operated assets that could also be pegged for sale.
"Where we are in the process is we are dealing with inquiries," Harvey said. "We're not going to cover what exact assets we're talking about" but Walter has received "actual contact on more than those assets," he added.Brandon Blossman of advisory firm Tudor, Pickering, Holt & Co. said the company is likely seeking a sale of its U.K. assets and a joint venture partner for Blue Creek and that more asset sales could come as the process takes shape. "Management implied they were working through a process on assets in addition to [the] U.K. and Blue Creek," Blossman said in an e-mail. News of asset sales and depressed earnings came just after a report from Benzinga that Walter had hired Goldman Sachs to sell the company outright. Blossman dismissed these rumors. The sale process "sounds like a sale of selected assets, not of the entire company," he said. Walter's spokeswoman, Ruth Pachman at Kekst & Co. and Goldman did not respond to calls seeking comment. When asked on the call why the company choose a target of $250 million over a period of nine months, Harvey, told analysts "it's a goal we believe is attainable."
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV