Contura Energy = Latest Post-Reorg Equity

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Contura Energy, f/k/a Alpha Natural Resources, filed its S-1 Registration Statement today looking to price an IPO of 6mm shares at somewhere between $23-27. We've noted the recent post-reorg equity bloodbath that has transpired in the energy space of late. Perhaps Contura can buck the trend. Unrelated, Peabody Energy ($BTU) traded up 2+% today. 

Notable (Contura Energy, Effed Education, Footwear, Memorial Production Partners)

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Contura Energy. The Tennessee-based metallurgical and steam coal company - probably better known in these parts as the once-and-recently-bankrupt Alpha Natural Resources filed for an IPO on Monday with plans to raise $100mm on the NYSE under the symbol $CTRA (Citi is sole underwriter). 

Education. Months ago we chronicled the affect that the oil and gas downturn was having on Oklahoman schools. Unfortunately, high debt and poor management in Puerto Rico seems to be having a similarly horrible affect on school children.

Footwear. Seven companies that are allegedly/particularly impacted by the recent wave of retail bankruptcies.

Labor Market. This study indicates that there is no unprecedented technological disruption. Seems counter-intuitive.

Memorial Production Partners/Amplify Energy. The company has emerged from chapter 11 with a new name and a delevered balance sheet to the tune of $1.3b. And now it has engaged Jefferies LLC as lead advisor to explore strategic alternatives.Fir Tree Partners, Millennial Energy Partners and Citadel LLC have representatives on the Board of Directors.

Passive Investing. There are now more index funds than there are individually traded stocks. Wait, what??

News for the Week of 2/12/17

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  • Coal. Prices have risen and Trump is promising assistance. Is this enough to offset sagging demand? China's new measures aren't helping. But the capital markets are, as Peabody Energy, Arch Coal, and Contura Energy are all taking advantage of cheap financing/refinancing options. Peabody shopped an upsized term loan (by $450mm) with revised company-favorable pricing; it also issued new notes and bonds. Amazing how quickly things changed with coal.
  • Chicago. S&P is making threats. 
  • Electric Vehicles. Something tells us that oil and gas management teams and their wildly astute restructuring bankers and advisors neglected to bake this element into their business plans. 
  • European Debt. Increasing concerns about Italy and Greece. Meanwhile, in France, CVC Capital Partners' owned vehicle leasing firm Fraikin has hired Rothschild to restructure its 1.4 billion Euro debt. Lazard will represent the mezz debt.
  • Moelis & Co. & Aramco. "Ken of Arabia"? C'mon, that's just dumb.
  • Power. California has more power plants than it needs. After a slate of power-related bankruptcies, it looks like there is more hurt to come in this space. And big developments on the storage side probably won't help. And this new cooling tech won't help either - if it's legit.
  • Retail. And people wonder why private equity is vilified...case and point: Rackspace. Speaking of private equity, Canada Goose's proposed IPO reeks of a dump-and-run on greater fools. Millennials don't spend money, but Bain Capital will have us believe that $900 fur-lined jackets are the exception to the rule. Riiiight. 
  • Retail Part II. Organized Retail Crime = massive problem. 
  • Retail Part III. Gander Mountain = toast.
  • Retail Part IV. Amazon announced that the number of third-party sellers on its B2B site has reached 45k, up about 50% from the approx 30k sellers it had at the end of Q2...IN JUNE.
  • Return of the Maturity Wall. Nothing gets restructuring professionals' juices flowing like sexy maturity stats. So, here it is: $2 trillion of corporate debt comes due in five years. And this is, in part, because the capital markets are definitely wide open right now in the face of soon-to-be rising interest rates. Take THAT wall, President Trump! 
  • Sears. Everyone is looking at this oncoming trainwreck and wondering "when?", not "if." Nice recent CDS movements on it but then the company unearthed a remarkable $1b in cost savings. Like, out of nowhere. And, naturally, the stock soared 25+%.
  • Spotify. Typically there are tremors before the earthquake. Perhaps Filip Technologies, Violin Memory, and Nasty Gal are the tremors foreshadowing a venture debt-backed reckoning on the horizon. It's unclear. But, in Spotify's case, the interest ratchets attached to $1b of debt get more and more expensive with each consecutive quarter sans IPO. A big "unicorn" is going to fail and fail big. Spotify may not be the one, but it ain't looking great. But that one IS coming (Zenefits anyone?). Along these lines, how the eff is Theranos not bankrupt yet? 
  • Takata. Inching towards bankruptcy.
  • Fast Forward: Most retail-focused restructuring pros emphasize "omni-channel," the latest retail buzzword that, practically speaking, means basically nothing in today's climate. Case and point: Neiman Marcus, which was downgraded this week with projected 10x leverage on $4.77b of debt. Most of the cap stack traded at new lows this week. Omni-channel ain't a panacea, it appears.
  • Rewind I: This result for Relativity Media sure sounds positive.
  • Rewind II: The grocery space is getting hammered so badly that now even Whole Foods is retrenching, shutting more stores than it's opening go-forward.
  • Chart of the Week: 
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