Peabody Energy files for Chapter 11 bankruptcy
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WASHINGTON, April 13, 2016 - Peabody Energy, the largest private-sector coal company in the world, has filed for Chapter 11 bankruptcy “to strengthen liquidity and reduce debt amid an unprecedented industry downturn,” the corporation said on Wednesday.
Peabody, which sells metallurgical coal (used in iron and steel-making) and thermal coal (used to generate electricity) to customers in 25 countries on six continents, released a statement explaining the move as a way to “reduce its overall debt level, lower fixed charges, improve operating cash flow and position the company for long-term success.”
Peabody President and CEO Glenn Kellow said the move to file “was a difficult decision, but… the right path forward.”
Citigroup has arranged $800 million in debtor-in-possession financing for the coal giant. Peabody's Australian entities were not included in the filings.
The company expects to conduct business as usual, including “paying employee wages and providing healthcare and other benefits without interruption” and continuing “the flow of goods and services to its customers” after the bankruptcy petition process.
Once demand for coal stabilizes - and Peabody is convinced it will eventually - Kellow said a company like his “with safe, efficient operations will be well positioned” to rise to the occasion and meet global demand.
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