Arch Coal Inc. surged to a second-straight intraday record Thursday as the company seeks a compromise with lenders opposed to a debt-swap deal that would help it stave off a bankruptcy filing.
Arch, which operates the West Elk Mine in Somerset, soared as much as 93 percent Thursday morning in New York trading. The stock, which has more than doubled in the past two days, was up 45 percent at $3.31 in after-hours trading.
Peabody Energy Corp., the largest U.S. coal miner that operates major mines in Wyoming, also gained, notching up 21 percent to $1.70 in after-hours trading.
“The market is pretty optimistic that Arch’s debt swap is going to happen,” said Kristoffer Inton, a Chicago-based analyst with Morningstar Investment Services Inc. “If this option works for Arch, it’s in the cards for Peabody down the road.”
Miners including Arch and Peabody are trying to avoid falling prey to a downturn that’s already pushed Patriot Coal Corp., Walter Energy Inc. and Alpha Natural Resources Inc. into bankruptcy this year. Coal producers are being undermined by slowing demand out of China and increased competition at U.S. power plants from cheap natural gas.
