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The news made Walter shares fall by about one-third on Monday night to 30c in what was the biggest ever daily fall for the stock.
With the coal miner not making a profit over the past four years the plunge also took the market cap to new depths of $US24.2 million compared to the $8.3 billion it had in the coal booming times of July 2011.
“Walter is expected to send a revised plan to first-lien lenders that includes a request for a debtor-in-possession loan that would allow the company to operate while in bankruptcy, Bloomberg News reported on Friday, citing two people with knowledge of the discussions,” the newswire reported.
Walter has reportedly not commented on this report.
Cowen and Co analysts Daniel Scott and Bryan Bergin, in a client note on Monday, said the news should not be surprising .
“Several coal management teams are faced with increasingly difficult decisions as coal market conditions show few signs of a nascent recovery,” they said.
