Item 1.01
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Entry into a Material Definitive Agreement.
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On April 13, 2016 (the Petition
Date), Peabody Energy Corporation (Peabody or the Company) and a majority of its wholly-owned domestic subsidiaries, as well as one international subsidiary in Gibraltar (collectively, the
Debtors), filed voluntary petitions for reorganization under chapter 11 of Title 11 of the U.S. Code in the United States Bankruptcy Court for the Eastern District of Missouri (the Bankruptcy Court), thereby commencing the
Chapter 11 cases captioned as In re Peabody Energy Corporation, et al., Case No. 16-42529 (Bankr. E.D. Mo.) (the Chapter 11 Cases).
Accounts Receivable Securitization Program
As previously disclosed, the Company has an accounts receivable securitization program (the AR Program) through its wholly owned
subsidiary, P&L Receivables Company, LLC (P&L Receivables). Under the AR Program, Peabody contributes a pool of eligible trade receivables (the Receivables) to P&L Receivables, which then sells, without recourse,
the Receivables to various conduit and committed purchasers. The AR Program has a maximum availability of $180 million and matures on March 25, 2018.
As disclosed in the Companys Current Report on Form 8-K filed on April 22, 2016, the Bankruptcy Court approved the AR Program on an
interim basis by order dated April 15, 2016. On May 18, 2016, the Bankruptcy Court entered an order approving the AR Program on a final basis.
DIP Financing
As previously disclosed,
the Debtors also filed a motion (the DIP Motion) on April 13, 2016 seeking authorization to use cash collateral and to approve financing (the DIP Financing) under that certain Superpriority Secured Debtor-In-Possession
Credit Agreement (the DIP Credit Agreement) by and among the Company as borrower, Global Center for Energy and Human Development, LLC (Global Center) and certain Debtors party thereto as guarantors (the Guarantors
and together with the Company, the Loan Parties), the lenders party thereto (the DIP Lenders) and Citibank, N.A., as Administrative Agent and L/C Issuer. The DIP Credit Agreement provides for, among other facilities, a term
loan not to exceed $500 million (the DIP Term Loan Facility) secured by substantially all of the assets of the Debtors (other than Peabody Holdings (Gibraltar) Limited, Peabody IC Holdings, LLC and Peabody IC Funding Corp.) and Global
Center, of which $200 million was available until the entry of the final order approving the DIP Credit Agreement.
On April 15,
2016, the Bankruptcy Court approved the DIP Motion on an interim basis [Docket No. 149] and authorized the Loan Parties to, among other things, (i) enter into the DIP Credit Agreement and initially borrow up to $200 million,
(ii) obtain a cash collateralized letter of credit facility in the aggregate amount of up to $100 million, and (iii) an accommodation facility for bonding requests in an aggregate stated amount of up to $200 million. On April 18,
2016, the Company entered into the DIP Credit Agreement with the DIP Lenders.
The DIP Credit Agreement was amended (the First DIP
Amendment) to extend the deadline for the Company to file a declaratory action with respect to the extent of certain collateral and secured claims of certain pre-petition creditors (the CNTA Dispute) on account of that certain
Amended and Restated Credit Agreement, dated September 24, 2013, as amended. On May 20, 2016, the Debtors filed a complaint and request for a declaratory judgment in the Bankruptcy Court regarding the CNTA Dispute. This filing is available
through Peabodys website, http://www.peabodyenergy.com, under the Chapter 11 protection tab, which contains a link to the claims agents website, www.kccllc.net/Peabody.
On May 18, 2016, the Company entered into a further amendment (the Second DIP Amendment) to the DIP Credit Agreement, which
among other items modified one of the milestones under the DIP Credit Agreement regarding the deadlines for the Company to file an Acceptable Reorganization Plan (as defined in the DIP Credit Agreement) and related disclosure statement in the
Chapter 11 Cases. Under the Second DIP Amendment, the Company must file an Acceptable Reorganization Plan and disclosure statement on the date that is the later of (a) 30 days after the entry of the order resolving the CNTA Dispute or
(b) 210 days following the Petition Date.
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The Second DIP Amendment also modified the Companys obligation to maintain a Minimum
Consolidated EBITDA (as defined in the DIP Credit Agreement) such that the first period to maintain such Minimum Consolidated EBITDA ends on July 31, 2016.
On May 18, 2016, the Bankruptcy Court entered a final order approving the DIP Credit Agreement, as amended (the Final
Order). On May 19, 2016, following entry of the Final Order, the Company drew down the remaining $300 million available under the DIP Term Loan Facility.
The foregoing description of the DIP Credit Agreement and the DIP Financing does not purport to be complete and is qualified in its entirety
by reference to the DIP Credit Agreement, which was filed as Exhibit 10.2 to the Current Report on Form 8-K filed by Peabody on April 18, 2016 and is incorporated herein by reference.
Moreover, the foregoing descriptions of the First DIP Amendment and the Second DIP Amendment do not purport to be complete and are qualified
in their entirety by reference to the First DIP Amendment and the Second DIP Amendment, which are attached as Exhibit 10.1 and Exhibit 10.2, respectively, to this Current Report on Form 8-K.