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Item 7.01
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Regulation FD Disclosure
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Amendments to Plan and Disclosure Statement
On January 27, 2017, the Debtors filed with the Bankruptcy Court the Second Amended Joint Plan of Reorganization (as amended, the
“Plan”) and the Second Amended Disclosure Statement (as amended, the “Disclosure Statement”) to address certain modifications resulting from a hearing before the United States Bankruptcy Court for the Eastern District of Missouri
on January 26, 2017.
Approval of Disclosure Statement
On January 27, 2017, solicitation versions of the Plan and the Disclosure Statement were filed with the Bankruptcy Court. The Bankruptcy
Court is expected to issue an order approving the Disclosure Statement on January 27, 2017. The Bankruptcy Court also approved the following items and is expected to issue orders regarding the following, subject to certain modifications:
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authorizing the Debtors to enter into and perform under the Plan Support Agreement, dated as of December 22, 2016, by and among the Company and certain of its lenders and noteholders (the “Plan Support
Agreement”);
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approving the Private Placement Agreement, dated as of December 22, 2016, by among the Company and certain of the Company’s creditors (the “Private Placement Agreement”), as amended by Amendment
No. 1 to Private Placement Agreement dated as of December 28, 2016 (the “PPA Amendment”);
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approving the private placement (the “Private Placement”) of $750 million in the aggregate of newly created mandatory convertible preferred stock of the reorganized company (“Reorganized PEC”)
pursuant to the Private Placement Agreement and in accordance with the Plan;
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authorizing the $750 million rights offering to eligible creditors for common stock of Reorganized PEC (the “Rights Offering”) to be conducted by the Company in accordance with the order, as contemplated by
the Plan;
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approving the Backstop Commitment Agreement, dated as of December 22, 2016, among the Company and certain of its noteholders (the “Backstop Commitment Agreement”), as amended by Amendment No. 1 to
Backstop Commitment Agreement dated as of December 28, 2016 (the “BCA Amendment”); and
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approving the exit facility commitment letter, dated as of January 11, 2017, from Goldman Sachs Bank USA, JPMorgan Chase Bank, N.A., Credit Suisse AG, Credit Suisse Securities (USA) LLC, Macquarie Capital Funding
LLC and Macquarie Capital (USA) Inc. (the “Exit Facility Commitment Letter”).
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The Plan Support Agreement, Private
Placement Agreement and Backstop Commitment Agreement were initially filed with the Bankruptcy Court on December 22, 2016 and previously disclosed along with the Private Placement and Rights Offering on the Company’s Form 8-K filed with
the Securities and Exchange Commission (the “SEC”) on December 23, 2016. The PPA Amendment and BCA Amendment were previously disclosed on the Company’s Form 8-K filed with the SEC on December 30, 2016. The Exit Facility
Commitment Letter was filed with the Bankruptcy Court on January 11, 2017 and previously disclosed on the Company’s Form 8-K filed with the SEC on January 12, 2017.
Copies of the relevant orders and the solicitation versions of the Plan and Disclosure Statement are available free of charge at
www.kccllc.net/Peabody.
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.
Update Regarding Support for Plan and Rights Offering
The deadline for eligible holders of the Company’s senior secured second lien notes and senior unsecured notes to sign joinders to the
Private Placement Agreement and Backstop Commitment Agreement was 5:00 p.m. New York City time on January 25, 2017. As of that time, holders of approximately 96.36% of the outstanding principal amount of the Company’s senior secured second
lien notes and approximately 88.72% of the outstanding principal amount of the Company’s senior unsecured notes were parties to each of the Plan Support Agreement, Private Placement Agreement and Backstop Commitment Agreement. Holders of
approximately 41.65% of the Company’s outstanding first lien debt and approximately 41.18% of the outstanding principal amount of the Company’s unsecured convertible junior subordinated debentures were parties to the Plan Support
Agreement.
Pursuant to the Plan, the date of issuance by the Bankruptcy Court of its order approving the Disclosure Statement will be the
record date for determining the eligibility of a holder of an Allowed Claim in Class 2A, 2B, 2C, 2D or 5B to participate in the Rights Offering. Pursuant to the Rights Offering, holders of Allowed Claims in 2A, 2B, 2C, 2D or 5B on the record date
will be entitled to purchase units comprised of shares of new common stock of reorganized Peabody Corporation and penny warrants exercisable into additional shares of new common stock. The allocation of
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subscription rights available to holders of Allowed Claims in those classes is set forth in the Plan. Mailing of subscription materials for the Rights Offering is expected to commence on
February 2, 2017 and the Rights Offering is expected to expire on March 2, 2017.
Each holder of the Company’s senior
secured second lien notes and senior unsecured notes that is party to the Backstop Commitment Agreement has agreed to fully exercise all subscription rights issued to it pursuant to the Rights Offering. The subscription rights are not transferable
other than in connection with the underlying Allowed Claim. In order to exercise subscription rights, holders of the Company’s senior secured second lien notes and senior unsecured notes held in book-entry form through the facilities of the
Depository Trust Company (“DTC”) must comply with the practices, processes and procedures of the DTC, including the DTC’s Automated Tender Offer Program. In addition, holders of the Company’s senior unsecured notes electing to
receive its pro rata share of the Class 5B Cash Pool (as defined in the Plan) will not be entitled to transfer their senior unsecured notes after making that election or to participate in the Rights Offering.
The information set forth in and incorporated into this Item 7.01 of this Current Report on Form 8-K is being furnished pursuant to
Item 7.01 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by
reference into any of Peabody Energy’s filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and regardless of any general incorporation language
in such filings, except to the extent expressly set forth by specific reference in such a filing. The filing of this Item 7.01 of this Current Report on Form 8-K shall not be deemed an admission as to the materiality of any information herein
that is required to be disclosed solely by reason of Regulation FD.
Cautionary Note Regarding Forward-Looking Statements
This Current Report contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking
statements include statements that relate to the intent, beliefs, plans or expectations of Peabody Energy or its management at the time of this Current Report, as well as any estimates or projections for the outcome of events that have not yet
occurred at the time of this Current Report. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements include expressions such as “believe” “anticipate,”
“expect,” “estimate,” “intend,” “may,” “plan,” “predict,” “will” and similar terms and expressions. All forward-looking statements made by Peabody Energy are predictions and not
guarantees of future performance and are subject to various risks, uncertainties and factors relating to Peabody Energy’s operations and business environment, and the progress of its Chapter 11 Cases, all of which are difficult to predict and
many of which are beyond Peabody Energy’s control. These risks, uncertainties and factors could cause Peabody Energy’s actual results to differ materially from those matters expressed in or implied by these forward-looking statements. Such
factors include, but are not limited to: those described under the “Risk Factors” section and elsewhere in Peabody Energy’s most recently filed Annual Report on Form 10-K and subsequent filings with the SEC, including its Quarterly
Reports on Form 10-Q for the quarters ended March 31, 2016 and June 30, 2016, which are available on Peabody Energy’s website at www.peabodyenergy.com and on the SEC’s website at www.sec.gov, such as unfavorable economic,
financial and business conditions, as well as risks and uncertainties relating to the Chapter 11 Cases, including, but not limited to:
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Peabody Energy’s ability to confirm and consummate the Plan;
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Peabody Energy’s ability to obtain Bankruptcy Court approval with respect to motions or other requests made to the Bankruptcy Court in the Chapter 11 Cases, including maintaining strategic control as
debtor-in-possession;
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the effects of the Chapter 11 Cases on Peabody Energy’s operations, including customer, supplier, banking, insurance and other relationships and agreements, and relationships with third parties, regulatory
authorities and employees;
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Bankruptcy Court rulings in the Chapter 11 Cases, as well as the outcome of all other pending litigation and the outcome of the Chapter 11 Cases in general;
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the length of time that Peabody Energy will operate under Chapter 11 protection and the continued availability of operating capital during the pendency of the proceedings;
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the risks associated with third-party motions in the Chapter 11 Cases, which may interfere with Peabody Energy’s ability to confirm and consummate the Plan and restructuring generally;
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increased advisory costs to execute the Plan and increased administrative and legal costs related to the Chapter 11 Cases and other litigation and the inherent risks involved in a bankruptcy process;
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the impact of the New York Stock Exchange’s delisting of Peabody Energy’s common stock on the liquidity and market price of Peabody Energy’s common stock and on Peabody Energy’s ability to access the
public capital markets;
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the likelihood that Peabody Energy’s common stock will be cancelled and extinguished upon confirmation of the proposed Plan with no payments made to the holders of Peabody Energy’s common stock;
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the volatility of the trading price of Peabody Energy’s common stock and the absence of correlation between any increases in the trading price and its expectation that the common stock will be cancelled and
extinguished upon confirmation of the proposed Plan with no payments made to the holders of Peabody Energy’s common stock;
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Peabody Energy’s ability to continue as a going concern in the long-term, including Peabody Energy’s ability to confirm the Plan that restructures Peabody Energy’s debt obligations to address Peabody
Energy’s liquidity issues and allow emergence from the Chapter 11 Cases;
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Peabody Energy’s ability to maintain adequate debtor-in-possession financing or use cash collateral;
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the potential adverse effects of the Chapter 11 Cases on Peabody Energy’s liquidity, results of operations, or business prospects;
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the cost, availability and access to capital and financial markets, including the ability to secure new financing upon and after emerging from the Chapter 11 Cases;
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the risk that the Chapter 11 Cases will disrupt or impede Peabody Energy’s international operations, including the Australian operations;
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and other risks and uncertainties. Forward-looking statements made by Peabody Energy in this Current Report, or elsewhere, speak only as of the date on which
the statements were made. New risks and uncertainties arise from time to time, and it is not possible for Peabody Energy to predict all of these events or how they may affect it or its anticipated results. Peabody Energy does not undertake any
obligation to publicly update any forward-looking statements except as may be required by law. In light of these risks and uncertainties, readers should keep in mind that the events referenced by any forward-looking statements made in this Current
Report may not occur and should not place undue reliance on any forward-looking statements.
The Plan provides that Peabody Energy equity
securities will be canceled and extinguished upon confirmation of the Plan by the Bankruptcy Court, and that the holders thereof would not be entitled to receive, and would not receive or retain, any property or interest in property on account of
such equity interests. The Plan also sets forth the proposed recoveries for Peabody Energy’s other securities. Trading prices for Peabody Energy’s equity or other securities may bear little or no relationship during the pendency of the
Chapter 11 Cases to the actual recovery, if any, by the holders thereof at the conclusion of the Chapter 11 Cases. In the event of cancellation of Peabody Energy equity securities, as contemplated by the Plan, amounts invested by the holders of such
securities would not be recoverable and such securities would have no value. Accordingly, Peabody Energy urges caution with respect to existing and future investments in its equity or other securities.
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