S&P to review Alpha ratings for possible downgrade
NEW YORK (AP) — Standard & Poor's Ratings Services on Wednesday placed the ratings of Alpha Natural Resources Inc., including its "BB-" corporate credit rating, under review for possible downgrade.
That rating is in junk or non-investment grade territory.
S&P cited the Bristol, Va.-based coal company's announcement that it plans further production cuts in 2013 as a result of weakening prices and demand for both thermal and metallurgical coal.
Coal companies like Alpha have struggled this year as power plans have increasingly switched to cheap and abundant natural gas.
The company said Tuesday that it's cutting production by 16 million tons and eliminating 1,200 jobs, laying off 400 workers immediately by closing mines in Virginia, West Virginia and Pennsylvania. The layoffs amount to nearly a tenth of Alpha's 13,000-person workforce.
S&P said it will review its performance expectations for Alpha, along with its cash position and future prospects before deciding whether to lower its ratings. It expects to make a decision within the next several weeks.
Alpha shares fell 18 cents, or 2.3 percent, to $7.70 in afternoon trading.