Bogdanka Slides to Three-Month Low on Change of Coal-Supply Deal

  • Miner revises deal with Engie, its second-biggest coal buyer
  • Haitong sees risk Engie may scrap deal expiring in 2019

Lubelski Wegiel Bogdanka SA, a Polish coal producer, retreated to a three-month low after agreeing to a lower coal price with its second-biggest customer.

Shares in Bogdanka plunged as much as 9.8 percent, before trading 9 percent lower at 35.45 zloty by 1:34 p.m. in Warsaw, the lowest since Aug. 27. The stock has lost 63 percent this year, the worst performer in Warsaw’s WIG20 Index, which has declined 21 percent.

The miner agreed to diminish the value of its contract to deliver coal to Elektrownia Polaniec power plant by 5.7 percent to 3.12 billion zloty ($783 million) in the 2013-2019 period, it said in a statement. Coal supplies to Engie SA’s facility accounted for 18 percent of its sales in the first half of this year, according to Bogdanka’s report. As fuel prices tumbled to the lowest since at least 2009, Polish power producer Enea SA, which buys almost half of Bogdanka’s coal, canceled one of its contracts in August.

“The news is negative” for Bogdanka, which is already facing weaker coal demand due to a mild winter in Poland, Robert Maj, an analyst at Haitong Bank SA in Warsaw, said by phone. Investors may also worry the revision will allow Polaniec to terminate the agreement before 2019, according to Maj, who advises his clients to sell the stock.

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