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Audley Capital Highlights Shortcomings of Walter Energy’s Naive Business Plan

  Audley Capital Highlights Shortcomings of Walter Energy’s Naive Business
  Plan

 Believes Company has Grossly Miscalculated Expectations for Met Coal Pricing
        Recovery and is Wholly Unprepared to Protect Stockholder Value

Business Wire

NEW YORK -- April 16, 2013

Audley Capital Advisors LLP (including certain related funds and investment
vehicles, “Audley Capital”) today issued the following statement questioning
Walter Energy, Inc.’s (NYSE: WLT) (TSX: WLT) (“Walter Energy” or “the
Company”) argument regarding pricing improvements in the metallurgical coal
(“met coal”) market. Audley Capital is continuing to urge stockholders to vote
the GOLD proxy card for its five nominees for election to the Board of
Directors at the Company’s upcoming 2013 Annual Meeting of Stockholders on
April 25, 2013.

Julian Treger, Managing Partner of Audley Capital Advisors, said, “Over the
past few weeks, including in its most recent letter to stockholders dated
April 15, 2013, Walter Energy expressed optimism regarding improving
conditions for met coal pricing. The Company has been pushing a plan that is
entirely predicated on the recovery of met coal pricing in the very near
future. We believe that demonstrates the lack of sophistication and thoughtful
analysis by the current Board. The Board has claimed that met coal prices are
at their trough, but as demonstrated by the downward pressure on met coal
pricing and recently disclosed Chinese growth figures, there is a very real
possibility that prices will fall further. Just yesterday, the impact on
Walter Energy’s share price was significant, wiping off another $200 million
of market capitalization to approximately $1.3 billion against a debt load of
approximately $2.5 billion.”

Added Mr. Treger, “We believe that the current Board is ill-prepared to
respond to continued price deterioration. Our analysis suggests that if met
coal prices drop further, the Company could face a liquidity crisis in the
foreseeable future and the Board would be forced to pursue financing that,
given what we see as the Board’s lack of sophistication in the capital
markets, could severely impact existing stockholders. We are concerned that
the very directors that created Walter Energy’s leverage problem are
ill-equipped to address the issue if met coal prices do not, as they wish,
bail them out of the current situation.”

Mr. Treger concluded, “We have consistently called attention to the fact that
there are options available to the Company that we think a skilled Board could
pursue to manage price volatility and financing constraints. Our director
nominees have proven their value in volatile and distressed situations. We
believe that our Board nominees – both as a collective group and as
individuals – are qualified to assist management to address issues of reducing
balance sheet risk, seeking joint venture partners for projects, divesting
underperforming and non-core assets, and upgrading existing reserves. We are
convinced that Walter Energy is in need of real, credible, sophisticated new
Board members to help restore confidence in the direction of the Company and
address all possible scenarios facing the business, including falling met coal
prices.”

Audley Capital notes that analysts are concerned about the Company’s prospects
to increase equity value over the coming 12 to 24 months, and ability to react
to a further deterioration in met coal pricing.

“…the Company remains at the whim of subdued global coal pricing. While we are
maintaining our HOLD rating on the stock in light of the recent pullback in
the shares, we would avoid any new positions pending better industry
fundamentals and incremental capital structure needs.” – KeyBanc; April 11,
2013

“We expect 1Q13 will be a difficult quarter for EPS results, reflecting the
weakest settlement for benchmark metallurgical coal pricing since quarterly
contracts began in 1Q10. On average, our 1Q13 EBITDA estimates are down 27%
q/q (excluding Walter Energy) driven primarily by the weaker pricing.” –
Stifel; April 15, 2013

“In light of the heavy debt load, BMO Research cannot rule out a potential
equity offering.” – BMO; March 31, 2013

“Lowering our 2013 view to a loss of $1.00 (from loss of $0.90) vs. the
Street's loss of $0.75; and maintaining our below-consensus 2014 estimate of
$0.80 (vs. the Street's $1.95).” – KeyBanc; April 11, 2013

Audley Capital urges stockholders to vote FOR its five director nominees by
immediately completing and returning their GOLD proxy card or by submitting
proxies by telephone or through the Internet. Investors that have any
questions or need assistance voting your shares, please call our proxy
solicitor, Okapi Partners LLC, at (877) 208-8903.

Additional Information

Further information regarding the director nominees and other persons who may
be deemed participants, and other matters, are set forth in a definitive proxy
statement filed with the Securities and Exchange Commission (“SEC”).
SHAREHOLDERS OF THE COMPANY ARE STRONGLY ADVISED TO READ THAT PROXY STATEMENT,
BECAUSE IT INCLUDES IMPORTANT INFORMATION. THE PROXY STATEMENT IS BEING SENT
TO SHAREHOLDERS BY OR ON BEHALF OF PARTICIPANTS, AND IS ALSO AVAILABLE AT NO
CHARGE ON THE SEC’S WEBSITE AT http://www.sec.gov.

*Audley Capital has not requested or obtained the consent of any third party
quoted.

Contact:

Investors:
Audley Capital Advisors LLP
Julian Treger, Managing Partner
+44 20 7529 6900
or
Okapi Partners LLC
Bruce Goldfarb/Charles Garske/Patrick McHugh
212-297-0720

Media:
Sard Verbinnen & Co
Dan Gagnier/Brian Shiver
212-687-8080