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Chesapeake stocks craters 50%, stock halted
(Gleb Garanich/Reuters)
Chesapeake shares dropped more than 50% on Monday morning and were halted at least four times for volatility.
Chesapeake's collapse on Monday follows a report from Debtwire that the oil and natural gas company hired Kirkland & Ellis to restructure $9.8 billion in debt.
After the latest halt for news pending, the company said it was not planning to pursue a bankruptcy.
From its statement:
"Chesapeake Energy Corporation stated today that Kirkland & Ellis LLP has served as one of Chesapeake's counsel since 2010 and continues to advise the company as it seeks to further strengthen its balance sheet following its recent debt exchange. Chesapeake currently has no plans to pursue bankruptcy and is aggressively seeking to maximize value for all shareholders."
Last week, the company announced that it was suspending quarterly dividend payments, as it continues to struggle in the fallout of the commodities crash.
The company had been bleeding cash for the last decade or so, even before the recent plunge in oil prices.
In the third quarter, Chesapeake wrote down the value of $5.42 billion worth of assets, and it reported a loss of $5 billion.
As Chesapeake's stock fell on Monday, investors also dumped its bonds, sending the yield on the bonds due next year above 100% for the first time.
The stock has dropped 90% over the last 12 months.
Here's a chart showing the fall on Monday:
(Google)
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