Item 1.01
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Entry into a Material Definitive Agreement
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Background
As previously disclosed, on April 13, 2016, Peabody Energy Corporation, a Delaware corporation (the Company or Peabody
Energy), and a majority of the Companys wholly owned domestic subsidiaries, as well as one international subsidiary in Gibraltar (collectively with the Company, the Debtors), filed voluntary petitions under Chapter 11 of
Title 11 of the U.S. Code (the Bankruptcy Code) in the United States Bankruptcy Court for the Eastern District of Missouri (the Bankruptcy Court). The Debtors Chapter 11 cases (collectively, the Chapter 11
Cases) are being jointly administered under the caption
In re Peabody Energy Corporation
,
et al.
, Case No. 16-42529.
On December 22, 2016, the Debtors filed with the Bankruptcy Court a Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code
(the Plan) and a related Disclosure Statement (the Disclosure Statement).
On December 23, 2016, the Company
filed a motion (the PSA Motion) with the Bankruptcy Court seeking authority to enter into a plan support agreement (the PSA) with certain of its lenders and noteholders (collectively, the PSA Signatories) to
effect an agreed upon restructuring of the Debtors obligations embodied in the Plan (the Restructuring). The Debtors have requested that the Bankruptcy Court hear the PSA Motion at the hearing currently scheduled for
January 26, 2017 (the PSA Hearing).
Copies of the Plan and the Disclosure Statement are available free of charge at
www.kccllc.net/Peabody
Bankruptcy law does not permit solicitation of acceptances of the Plan until the Bankruptcy Court approves the
Disclosure Statement. Accordingly, nothing contained herein is intended to be, nor should it be construed as, a solicitation for a vote on the Plan. The Plan will become effective only if it is confirmed by the Bankruptcy Court. There can be no
assurance that the Bankruptcy Court will confirm the Plan or that the Plan will be implemented successfully.
All information contained in
the Disclosure Statement is subject to change, whether as a result of amendments to the Plan, actions of third parties or otherwise.
Amendment to
Private Placement Agreement
In accordance with the Plan, the Company has agreed to conduct a private placement (the Private
Placement) pursuant to the private placement agreement, dated as of December 22, 2016 (the Private Placement Agreement) among the Company and certain of the Companys creditors (the Private Placement Parties).
Pursuant to the Private Placement Agreement, the Private Placement Parties will have the right and obligation to purchase $750 million in the aggregate of newly created mandatory convertible preferred stock (Preferred Equity) of the
reorganized company (Reorganized PEC) in a private placement exempt from registration pursuant to section 4(a)(2) of the Securities Act of 1933 (the Securities Act). The Debtors will seek approval of the Private Placement and
the Private Placement Agreement as part of the PSA Motion at the PSA Hearing.
On December 28, 2016, the Company and the Private
Placement Parties entered into Amendment No. 1 to the Private Placement Agreement to extend the deadline for certain of the Companys creditors to become a Phase Two Private Placement Party (as defined in the Private Placement Agreement)
to 5:00 p.m. New York City time on December 30, 2016.
The foregoing descriptions of the Private Placement and the Private Placement
Agreement, as amended, do not purport to be complete and are qualified in their entirety by reference to the Private Placement Agreement, a copy of which was filed as Exhibit 10.2 to the Companys Current Report on Form 8-K filed on
December 23, 2016, and Amendment No. 1 thereto, a copy of which is filed as Exhibit 10.1 hereto and incorporated herein by reference.
2
Amendment to Backstop Commitment Agreement
In accordance with the Plan, (i) the Company also has agreed to conduct a $750 million rights offering to eligible creditors for shares of
common stock of Reorganized PEC (the Rights Offering) and (ii) the Rights Offering will be 100% backstopped by certain of the Companys noteholders (the Commitment Parties), in each case on the terms and subject to
the conditions described in the term sheet for the Plan (previously filed as Exhibit 99.1 to the Companys Current Report on Form 8-K filed on December 23, 2016) and pursuant to the backstop commitment agreement, dated as of
December 22, 2016 (the Backstop Commitment Agreement) among the Company and the Commitment Parties. The Debtors will seek approval of the Rights Offering and the Backstop Commitment Agreement as part of the PSA Motion at the PSA
Hearing.
The rights to purchase shares of common stock of Reorganized PEC in the Rights Offering, any shares issued upon exercise
thereof, and all shares issued to the Commitment Parties pursuant to the Backstop Commitment Agreement will be issued in reliance upon an exemption from registration under the Securities Act provided by Section 1145 of the Bankruptcy Code,
Section 4(a)(2) of the Securities Act and/or Regulation D thereunder.
On December 28, 2016, the Company and the Commitment
Parties entered into Amendment No. 1 to the Backstop Commitment Agreement to extend the deadline for certain of the Companys creditors to become a Phase Two Commitment Party (as defined in the Backstop Commitment Agreement) to 5:00 p.m.
New York City time on December 30, 2016.
The foregoing descriptions of the Rights Offering and the Backstop Commitment Agreement, as
amended, do not purport to be complete and are qualified in their entirety by the Backstop Commitment Agreement, a copy of which was filed as Exhibit 10.3 to the Companys Current Report on Form 8-K filed on December 23, 2016, and
Amendment No. 1 thereto, a copy of which is filed as Exhibit 10.2 hereto and incorporated herein by reference.