Cloud Peak Energy (Coal) Files For Chapter 11
One of the largest domestic coal companies has voluntarily filed for Chapter 11 bankruptcy. Cloud Peak Energy warned of its financial problems in November of last year.
By 2018, Cloud Peak had nearly no cash, were hundreds of millions of dollars in debt, and sold less coal than it had in years. The company points to weak coal markets, while analysts add heavy investment into exports caused its problems too. Clark Williams-Derry, director of energy finance at Sightline Institute, an environmentally-focused think-tank, said the companys big bets into Asian exports didnt work out.
"Those bets ultimately blew up the company. Asian coal prices collapsed, and Cloud Peaks investments in export projects turned into hundreds of millions of dollars in losses, he said. Andy Blumenfeld, head of market analytics for Doyle trading consultants, a boutique energy research firm, said Cloud Peak also had to compete against companies that cleared their debt in previous bankruptcies: Peabody Energy and Arch Coal.
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In a statement, Cloud Peaks CEO Colin Marshall said wrote it's continuing to market sales of its assets. It has two mines in Wyoming and one in Montana. Many more filings are likely to come in coming days to shed light on their strategy.
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