The Virginian-based coal giant announced Tuesday that it would offer, subject to market conditions, $300 million of convertible senior notes due 2017 in an underwritten public offering.
Alpha said in a release that the notes would be guaranteed under Alpha’s 9.75% senior notes due in 2018 and “be convertible under certain circumstances and during certain periods into cash, Alpha’s common stock or a combination thereof, at Alpha’s election”
The company said it intends to use the proceeds of the raising to fund purchases or repayments of outstanding debt.
Barclays, JP Morgan, BofA Merrill Lynch, Citigroup, Morgan Stanley, BMO Capital Markets and Deutsche Bank Securities are acting as joint book-running managers in connection with this offering.
Alpha announced its first quarter results on Monday, in which it increased its net loss to $US111 million for the March quarter, from $29 million for the previous corresponding period.
This was primarily due to lower per ton realizations on metallurgical and Eastern thermal coal, and lower shipment volumes of Eastern and Western thermal coal.
It was partly offset by lower cost of coal sales per ton and lower selling, general and administrative expenses, the company said.
Total revenue in the first quarter was $1.3 billion, compared with $1.9 billion in the first quarter of 2012, and coal revenue was $1.1 billion, down from $1.6 billion in the year-ago period.
Alpha chairman and chief executive Kevin Crutchfield said despite the lower quarterly revenue and income figures, the company maintained a sharp focus on operational execution in the March quarter and was building on its recent strategic restructuring.
“The restructuring plan we announced in September is largely behind us, and we've taken many necessary steps to align our business with current market conditions from both an operational and capital spending standpoint,” he said.
“Going forward, we will continue to assess the need for further adjustments to our portfolio and marketing strategy where necessary to position ourselves for both sides of the commodity cycle.”
