In an announcement released very early Wednesday morning, Peabody Energy Corp. (NYSE: BTU) filed voluntary petitions for Chapter 11 bankruptcy protection for the majority of its U.S. entities. No Australian entities are included in the filings, and operations in Australia are not being affected.
There has been no question about whether this day would come, only when. The company indicated a month ago that it may not be able to continue without bankruptcy protection.
Peabody also said that it had terminated its efforts to sell assets in New Mexico and Colorado after the buyer was unable to complete the transaction. The proposed $358 million sale to Bowie Resource Partners had been stalled for some time as Bowie had difficulty getting financing for the deal.
The company said that it has received $800 million of debtor-in-possession financing arranged through Citigroup and a “number of the company’s secured lenders and unsecured noteholders.” The facilities include a $500 million term loan, a $200 million bonding accommodation facility and a cash collateralized $100 million letter of credit facility. All are subject to court approval and other limitations. In addition to the company’s existing cash position, Peabody believes that it has sufficient liquidity to operate its business worldwide post-petition and to continue the flow of goods and services to its customers.
CEO Glenn Kellow said:
A company like Peabody with safe, efficient operations will be well positioned to serve coal demand that will continue in the United States and around the world. We are a leading producer and reserve holder in our core regions of the Powder River Basin, Illinois Basin and Australia. Peabody has a new management team, outstanding workforce, unmatched asset base and strong underlying operational performance that represent a key driver in the company’s future success.
Peabody’s filing means that 75% of all the coal mined in Wyoming’s Powder River Basin is now being dug out by bankrupt mining companies. Arch Coal and Alpha Natural Resources have previously filed for bankruptcy protection.
Shares of Peabody were immediately suspended from trading on the New York Stock Exchange. The shares closed at $2.07 on Tuesday, in a 52-week range of $2.00 to $84.00.
Take This Retirement Quiz To Get Matched With An Advisor Now (Sponsored)
Are you ready for retirement? Planning for retirement can be overwhelming, that’s why it could be a good idea to speak to a fiduciary financial advisor about your goals today.
Start by taking this retirement quiz right here from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes. Smart Asset is now matching over 50,000 people a month.
Click here now to get started.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
