The Columbus, Ohio-based steam coal producer told the SEC it expected to report a net loss of $26.1 million in 2012, deepening from a loss of $8.3 million in 2011. Oxford said the increase in the net loss primarily was due to lower sales volumes resulting from decreased production from the company’s Illinois Basin operations and the related impairment and restructuring expenses.
Adjusted EBITDA was expected to be $47.9 million for 2012, compared with adjusted EBITDA of $58.8 million for 2011, Oxford added.
About three years ago, Oxford began branching out from its traditional base of operations in Ohio’s Northern Appalachia to western Kentucky, where it opened several high-sulfur surface mines. In February 2012, however, Big Rivers Electric Corp., a Henderson, Ky.-based generation and transmission co-op, threw a major kink in Oxford’s IB expansion plans when it abruptly terminated a coal supply agreement that was to have run through 2015.
Oxford responded by filing a breach of contract suit against Big Rivers in Ohio County Circuit Court in Hartford, Ky. Oxford said Big Rivers’ decision could result in as much as $20 million in damages. The contract cancellation caused Oxford to close the Briar Hill surface mine and reduce operations at the Rose France surface mine, both in Muhlenberg County.
In January, Oxford, which went public in the U.S. in 2010, told the SEC that continued weakness in coal markets was responsible for its decision to suspend cash distributions on both its common and subordinated units in the fourth quarter of 2012 to further preserve liquidity. The company also said it planned to refinance its credit facility.
More than two months later, Oxford cited its continuing efforts to get lenders to extend the terms of its existing credit facility for its failure to meet the SEC’s reporting deadline. The company had until April 2 before it was in technical violation of the federal agency’s rules, and Brad Harris, Oxford senior vice president, CFO and treasurer, expressed confidence it would avoid the violation.