Walter Energy Declines the Most in 18 Months After China Slows

Walter Energy Inc. (WLT), the U.S. producer of metallurgical coal that is the target of a shareholder action, fell the most in 18 months after unexpected slowing of economic growth in China, the metal’s biggest user.

Walter tumbled 12 percent to $21.28 at 1:50 p.m. in New York after the Birmingham, Alabama-based company fell as much as 13 percent, the most since Sept. 21, 2011. Alpha Natural Resources Inc. (ANR), the country’s second-largest coal miner by sales, fell as much as 11 percent.

China’s economic growth lost momentum as factory output weakened last month, according to data from the National Bureau of Statistics in Beijing. The economy expanded at a 7.7 percent annual pace in the first quarter, the bureau said today, compared with 8 percent expected by analysts’ estimates compiled by Bloomberg.

Walter led declines in companies producing metals and steelmaking ingredients because investors are concerned about the outcome of a shareholder action at the company, said Daniel Scott, an analyst at Cowen and Co. in New York.

“Everything is getting obliterated by the Chinese data,” Scott said in an interview by phone today. Walter “has just got the stigma of uncertainty to it on top of everything else.”

Audley Capital Advisors LLC has nominated five directors to Walter’s board, saying the company’s administrative costs and debt are too high. Egan-Jones Ratings Co., Institutional Shareholder Services Inc., and Glass Lewis & Co. LLC have recommended shareholders vote for the existing directors. Walter’s annual meeting is scheduled for April 25.

Citigroup Inc. expects the price of metallurgical coal to fall 4 percent to $165 a ton in the third quarter from $172 this quarter, according to an April 12 report. Low-volatility coking coal traded at $157.50 on March 22, according to data from Knoxville, Tennessee-based Energy Publishing Inc.

The largest U.S. coal producer is Peabody Energy Corp. (BTU)

To contact the reporter on this story: Sonja Elmquist in New York at selmquist1@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net

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