Peabody Energy Says It May Have to Seek Bankruptcy Protection
March 16 2016 - 8:40AM
Dow Jones News
Peabody Energy Corp. posted a going-concern notice in a
regulatory filing, warning that it may have to seek chapter 11
bankruptcy if its efforts to negotiate with creditors fails.
Shares, which have already lost more 95% of their value in the
past 12 months, fell 33% in premarket trading.
The coal producer has posted a string of quarterly losses over
the last two years as it grappled with low energy prices. On
Wednesday, Peabody pointed to uncertainty around global coal
fundamentals, economic growth concerns of some major coal-importing
nations and the potential for additional regulatory requirements on
coal producers as reasons for its notice.
Peabody said it had delayed an interest-rate payment on two
loans, triggering a 30-day grace period. If the payments aren't
made within 30 days, an event of default would be declared.
The company also said it expects that a metric of profitability
will fall below a contractual level, triggering a default at the
end of the month of its revolving credit facility. Last month
Peabody said it would draw down the balance of its $1.65 billion
revolving credit facility.
Earlier this month, Peabody disclosed that it has discussed
debt-cutting options with one of its senior lenders.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
March 16, 2016 08:25 ET (12:25 GMT)
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