The coal producer Foresight Energy LP (NYSE:FELP) has revealed that it failed to make a $23.6m interest payment at the expiration of a 30-day “grace period.”
In a March 18 8-K report filed with the Securities and Exchange Commission (SEC), Foresight said that it and its subsidiaries not only failed to pay the $23.6m in accrued and unpaid interest that was due Feb. 16 but also failed to do so at the end of the grace period that ended March 16.
The money was due under the issuers’ 7.875% Senior Notes due in 2021.
“The failure to pay the interest within the 30-day grace period triggered an event of default under the Indenture,” according to the report. “Events of default also exist under Foresight Energy LLC’s credit agreement governing its senior secured credit facilities, Foresight Receivables LLC’s receivables financing agreement and the credit agreements governing certain equipment financings of certain other subsidiaries of the Partnership as a result of the Issuers failing to make the interest payment prior to the end of the 30-day grace period.”
“The Issuers’ existing forbearance agreement with certain holders of the Notes remains in effect through March 22, 2016,” Foresight goes on to say in the SEC filing. “The existing forbearance agreement with certain lenders under Foresight Receivables LLC’s receivables financing agreement remains in effect through March 22, 2016.”
Days earlier, Foresight had made an SEC filing saying that it was actively negotiating an out-of-court settlement with certain note-holders. If the negotiation fails, Foresight has indicated that it might join the growing list of coal producers to seek protection under Chapter 11 bankruptcy reorganization.