Wednesday, April 13, 2016

Peabody Coal Company Files Chapter 11 Bankruptcy

Peabody Energy, the world’s largest private-sector coal company, has filed for bankruptcy.  It’s the fourth major U.S. coal company to go bankrupt in the last year.  This energy sector has been hit hard by the natural gas boom. 
In a statement, the company said that with the Chapter 11 filing, it intends to reduce its debt level, improve its cash flow, and “position the company for long-term success, while continuing to operate under the protection of the court process.” 
Peabody is more than $6 billion in debt. Last month, the company missed a $71 million interest payment and its credit rating was downgraded to a “D” by Standard and Poor’s. Recently, Peabody had been attempting to sell off mines in New Mexico and Colorado in order to stay afloat, but the company’s statement notes that those planned sales have been terminated. (Peabody’s Australian arm is not part of the bankruptcy filing.)
Peabody had “self-bonded” to cover $1.4 billion in mine reclamation and cleanup costs.  Peabody has announced that it intends to continue to work with the applicable state governments and federal agencies to meet its reclamation obligations.  (Grist, 4/13/2016)

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