ST. LOUIS, May 21 /PRNewswire-FirstCall/ -- Patriot Coal Corporation
(NYSE: PCX) today announced the pricing of $175 million in aggregate
principal amount of 3.25% Convertible Senior Notes due 2013 (the "notes").
Patriot has also granted the initial purchasers of the notes a 30-day
option, beginning on and including the pricing date, to purchase up to $25
million additional aggregate principal amount of the notes to cover
over-allotments, if any. The notes will be convertible into cash and, if
applicable, shares of Patriot's common stock. The initial conversion rate
for the notes will be 7.3889 shares of Patriot's common stock per $1,000
principal amount of notes, which is equivalent to an initial conversion
price of approximately $135.34 per share of common stock and represents a
40% conversion premium over the last reported sale price of Patriot's
common stock on May 21, 2008, which was $96.67 per share. The conversion
rate and the conversion price will be subject to adjustment in certain
events, such as distributions of dividends or stock splits. Patriot expects
to close this offering on or about May 28, 2008, subject to the
satisfaction of customary closing conditions.
Interest on the notes will be payable semi-annually in arrears on May
31 and November 30 of each year, beginning November 30, 2008. The notes
will mature on May 31, 2013, unless converted, repurchased or redeemed in
accordance with their terms prior to such date. The notes will be senior
unsecured obligations and will rank equally with all of the company's
existing and future senior debt and senior to any of the company's
subordinated debt.
Patriot intends to use the proceeds of the offering to reduce the
principal balance of the debt to be assumed in connection with its pending
acquisition of Magnum Coal Company, and the remainder, if any, for general
corporate purposes or to redeem the notes if the acquisition is not
consummated.
The notes and any shares of common stock issuable on conversion of the
notes have not been registered under the Securities Act of 1933, as amended
(the "Securities Act") or any state securities laws. They will be offered
only to qualified institutional buyers pursuant to Rule 144A promulgated
under the Securities Act and may not be offered or sold in the United
States, except pursuant to an exemption from the registration requirements
of the Securities Act and applicable state securities laws.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy these securities, nor shall there be any
sale of these securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any jurisdiction.
About Patriot Coal
Patriot Coal Corporation is a leading producer and marketer of coal in
the eastern United States, with ten company-operated mines and numerous
contractor-operated mines in Appalachia and the Illinois Basin. Patriot
ships to electric utilities, industrial users and metallurgical coal
customers, and controls approximately 1.3 billion tons of proven and
probable coal reserves.
Patriot's common stock trades on the New York Stock Exchange under the
symbol PCX.
Important Information for Existing Stockholders
The Company has filed a Registration Statement on Form S-4 (the
"Registration Statement") with the Securities and Exchange Commission (the
"SEC") in connection with the proposed issuance of Company common stock in
the transaction with Magnum Coal Company ("Magnum") that includes a
preliminary proxy statement/prospectus. The Registration statement has not
yet become effective. Patriot and Magnum stockholders are urged to read the
final proxy statement/prospectus when it becomes available and any other
relevant documents filed with the SEC because they will contain important
information about Patriot's transaction with Magnum. Investors and
stockholders may obtain these documents free of charge at the website
maintained by the SEC at http://www.sec.gov. In addition, documents filed
with the SEC by the Company are available free of charge by contacting
investor relations by phone at 314-275-3680, in writing to Janine A. Orf,
Director of Investor Relations, or by email to jorf@patriotcoal.com. The
final proxy statement/prospectus will be mailed to stockholders. The
documents described in this paragraph relate to Patriot's transaction with
Magnum and are not related to the offering described in this document.
This communication shall not constitute an offer to sell or the
solicitation of an offer to buy securities, nor shall there be any sale of
securities in any jurisdiction in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the
securities laws of such jurisdiction.
The Company, Magnum and certain of their respective directors,
executive officers and other members of management and employees may be
deemed to be participants in the solicitation of proxies from the
stockholders of the Company in connection with the proposed issuance.
Information about the Company's directors and executive officers is set
forth in the Company's Annual Report on Form 10-K for the year ended
December 31, 2007 filed with the SEC on March 14, 2008 and in the proxy
statement for the Company's 2008 annual meeting of stockholders filed by
the Company with the SEC on April 7, 2008. Additional information regarding
the potential participants in the proxy solicitation and information
regarding the interests of such potential participants will be included in
the final proxy statement/prospectus and the other relevant documents filed
with the SEC when they become available.
Forward Looking Statements
Certain statements in this press release, including statements
regarding the offering, note terms, use of proceeds and acquisition, are
forward-looking as defined in the Private Securities Litigation Reform Act
of 1995. These statements involve certain risks and uncertainties that may
be beyond our control and may cause actual future results to differ
materially from expectations. Factors that could affect Patriot's results
include, but are not limited to: failure to obtain Patriot stockholder
approval of the proposed issuance of Patriot common stock in connection
with the acquisition of Magnum; failure to obtain, delays in obtaining or
adverse conditions contained in any required regulatory or other approvals
in connection with such acquisition; availability and cost of financing;
failure to consummate or delay in consummating the acquisition for other
reasons; changes in laws or regulations; changes in general economic
conditions, including coal and power market conditions; the outcome of
commercial negotiations involving sales contracts or other transactions;
Patriot's dependence on Peabody Energy Corporation in the near future;
geologic, equipment and operational risks associated with mining; supplier
and contract miner performance and the availability and cost of key
equipment and commodities; Patriot's ability to replace coal reserves;
labor availability and relations; availability and costs of transportation;
weather patterns affecting energy demand; legislative and regulatory
developments; risks associated with environmental laws and compliance; the
outcome of pending or future litigation; and the availability and costs of
competing energy resources. Patriot undertakes no obligation (and expressly
disclaims any such obligation) to publicly update or revise any
forward-looking statement, whether as a result of new information, future
events or otherwise. For additional information concerning factors that
could cause actual results to materially differ from those projected
herein, please refer to the Company's Form 10-K, Form 10-Q and 8-K reports.
SOURCE Patriot Coal Corporation
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Related links:
http://www.patriotcoal.com
CONTACT:
Janine Orf of Patriot Coal Corporation,
+1-314-275-3680
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