|
The
company listed both assets and liabilities in the range of $10
billion to $50 billion, according to a court filing.
(http://1.usa.gov/1YsVlD0)
The case is in the U.S. Bankruptcy Court for the Eastern
District of Missouri, St. Louis, case number 16-42529.
Peabody's Chapter 11 bankruptcy filing ranks among the largest
in the commodities sector since energy and metals prices began
to fall in the middle of 2014 as once fast-growing markets such
as China and Brazil began to slow.
"This was a difficult decision, but it is the right path forward
for Peabody," Chief Executive Officer Glenn Kellow said in a
statement. "This process enables us to strengthen liquidity and
reduce debt, build upon the significant operational achievements
we've made in recent years and lay the foundation for long-term
stability and success in the future."
Peabody has secured $800 million in debtor-in-possession
financing from both secured and unsecured creditors, including a
$500 million term loan, $200 million bonding accommodation
facility and a letter of credit worth $100 million, the company
said in release.
Peabody's debt troubles date back to its $5.1 billion leveraged
buyout of Australia's Macarthur in 2011, a coveted asset at the
time meant to position it as a supplier of metallurgical coal
for Asian steel mills.
But as demand for metallurgical coal fell, particularly in
China, Peabody's financial woes intensified. It made a $700
million writedown on its Australian metallurgical coal assets
last year.
At home, the miner was hit by the U.S. shale boom of the past
few years that has made natural gas competitive with thermal
coal, as well as by new environmental regulations by the Obama
presidency that raised operational costs.
With coal-fired power generation struggling to compete on price
with shale gas and new laws restricting investment in the
sector, the U.S. coal industry went into an existential crisis.
Producers accounting for about 45 percent of U.S. coal output
have filed for bankruptcy in the current industry downturn,
based on 2014 government figures.
While coal use has also stalled globally, largely because of
China's economic slowdown and its efforts to protect domestic
miners and rein in rampant pollution, most analysts expect
consumption of the fuel to remain stable or rise in the future.
Some 500 coal-fired power stations are currently under
construction, 80 percent of which are in the Asia-Pacific
region, where emerging markets as well as developed economies
such as Japan and South Korea are still seeing consumption grow.
(Reporting by Tracy Rucinski in Chicago and Tom Hals in
Wilmington, Delaware; Additional reporting by Jessica DiNapoli,
Shivam Srivastava and Henning Gloystein; Editing by Sunil Nair
and Tom Hogue)
[© 2016 Thomson Reuters. All rights
reserved.] Copyright 2016 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
|
