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Peabody Energy Declares Chapter 11 Bankruptcy

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Peabody Energy Declares Chapter 11 Bankruptcy

Peabody Energy Corporation (NYSE: BTU) announced Wednesday morning it has voluntarily filed petitions under Chapter 11 for the majority of its U.S. entities in a U.S. Bankruptcy Court.

Peabody Energy stated that through the process, it intends to reduce its overall debt load, lower fixed charges, improve its operating cash flow and better position the company towards long term success.

New York Stock Exchange regulations dictate that trading in shares of the company's stock is to be suspended immediately.

The company added that all of its mines and offices will continue operating during the process and none of its Australian entities are including the bankruptcy filings. Peabody Energy noted it has obtained $800 million in debtor-in-possession financing facilities.

Peabody Energy cited "unprecedented" factors that affected the global coal industry, including a "dramatic" drop in the price of metallurgical coal, weakness in the Chinese economy, overproduction of domestic shale gas and ongoing regulatory challenges.

"This was a difficult decision, but it is the right path forward for Peabody. We begin today to build a highly successful global leader for tomorrow," said Peabody President and Chief Executive Officer Glenn Kellow. "Through today's action, we will seek an in-court solution to Peabody's substantial debt burden amid a historically challenged industry backdrop. 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."

 

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