One of the nation’s largest coal companies with three mines in Montana reported Monday it’s unsure how long it can survive.
Westmoreland Coal Co. issued its annual report today with a statement from its independent auditor that "substantial doubt" exists regarding the company’s ability to continue as a going concern.
Westmoreland is the sixth-largest North American coal producer and has 3,200 employees.
But it’s been losing money quarter after quarter as far back as 2012. Over the past 12 months, Westmoreland stock has lost 97 percent of its value and the company is well over a billion dollars in debt.
Shares of Colorado-based Westmoreland traded at just over 41 cents at the market’s close Monday. A year ago, Westmoreland stock was selling for more than $15 a share.
Westmoreland owns three Montana coal mines: the Rosebud mine at Colstrip, the Absaloka near Hardin, and the Savage Mine along the Montana/North Dakota border. While the company is in financial turmoil, it’s still pursuing three new mine permits in the state.
In December, Westmoreland stock saw a brief jump when the Department of Interior announced it had approved a 60-million ton expansion in Montana. However, the agency later backtracked and said it should not have made the announcement and the proposal was only under consideration.
Westmoreland is the primary supplier of coal for the Colstrip power plant, which is facing a rising likelihood of full closure within the next decade.
Westmoreland has also been operating without a top executive for months announced Monday it was suspending its search for a new CEO.
In its report, Gary Kohn, Westmoreland’s Chief Financial Officer, stated, “Together with our financial and legal advisers we are designing an improved capital structure for Westmoreland Coal and all of our subsidiaries. Our aim is to create a capital structure that better aligns with our cash flow and allows for an improved balance sheet. During the restructuring process, we have remained focused on safety and on providing our customers with the level of service they have come to expect from Westmoreland.”
In light of ongoing discussions with Westmoreland’s creditors in connection with the Company’s capital structure review, Westmoreland will not host a conference call for investors this quarter. Publicly traded companies typically hold these calls to allow company executives to give their take on the quarterly performance and take questions from analysts.
The U.S. coal industry has been in a tailspin for the last few years, pinched by cheap natural gas and consumer demand for other energy sources. Last week, another coal producer, FirstEnergy Corp., filed for bankruptcy.