U.S. coal mining companies appear to be in a “win-some, lose-some” period right now. Peabody Energy Corp. (NYSE: BTU) emerged from bankruptcy in April, and while the stock has gained only about 50 cents a share since then, the company’s announcement of a share buyback and a possible dividend beginning in the first quarter of next year pushed shares to their highest level since the stock relisted.
If Peabody is a winner, Contura Energy is among the losers. Contura, which was formed out of the restructuring of bankrupt Alpha Natural Resources, was on the calendar for an initial public offering (IPO) on Thursday. Instead, Contura officially withdrew its planned IPO in a filing with the U.S. Securities and Exchange Commission.
The company had planned to sell 6 million shares in an expected price range of $23 to $27 to raise $150 million at a market cap of $728 million. Underwriters for the IPO included Citigroup, Jefferies, Credit Suisse, UBS Investment Bank, Barclays, BMO Capital Markets, Clarksons Platou Securities, FBR Capital Markets and Seaport Group.
An earlier coal company IPO, Ramaco Resources Inc. (NASDAQ: METC), has seen shares dump around 45% of their value since the metallurgical coal producer’s February debut.
Boosterism at the highest levels hasn’t done anything to raise the outlook for coal pricing beginning next year.
One sector that has been booming and might expect to see some better IPO treatment is energy. But Friday’s IPO of Ranger Energy Services Inc. (NYSE: RNGR) didn’t go as well as was hoped. Ranger provides well services to Permian Basin producers, and the company sold 5 million shares this morning at $14.50 a share, well below the expected price range of $16 to $18. Underwriters included Credit Suisse, Simmons, Wells Fargo Securities, Barclays, Evercore ISI, Capital One Securities, Johnson Rice, Raymond James and Scotia Howard Weil.
Stubbornly low prices for crude oil are causing producers to reexamine their capital spending plans, and some are delaying well completion and other services such as those offered by Ranger.
Ranger stock traded down about 6.4% just minutes before noon Friday to $13.57, a penny above the day’s lowest price. The IPO price of $14.50 is the intra-day high. About 1.4 million shares had been traded so far Friday.