Nomura Analyst Curt Woodworth released a report on Walter Energy Wednesday morning stating that the company may suspend its dividend at its July board meeting.
A dividend cut would save the company $31 million while cutting capital spending by between $40 and $50 million, and would allow the company to get covenant relief.
The report also stated that Walter may seek alternatives in order to restructure and refinance its term loan in the near term.
Nomura has a Neutral rating on Walter Energy and a $13 price target.
Walter Energy shares fell sharply following the report, giving up 10.7 percent to $10.28 midway through the session Wednesday