Coal producer Peabody wins approval of in-bankruptcy financing

Peabody Energy, the nation’s largest coal producer, announced May 17 that the company has received final approval from the U.S. Bankruptcy Court for the Eastern District of Missouri for its $800 million Debtor-in-Possession (DIP) financing facility.

On April 13, Peabody voluntarily filed petitions under Chapter 11 for the majority of its U.S. entities. No Australian entities are included in the filings, and Australian operations are continuing as usual.

The approval, granted following a hearing before Judge Barry S. Schermer, provides Peabody with access to capital to ensure the company can continue operating its business in the ordinary course during the Chapter 11 process. The financing by a lender group that includes participation of a number of secured lenders and unsecured noteholders, includes a $500 million term loan, a $200 million bonding accommodation facility, and a cash-collateralized $100 million letter of credit facility. 

The court also granted final orders approving several other motions, including approval of the company’s long-term incentive plan for non-insiders, and approval for the planned sale of the company’s minority interest in the coal-fired Prairie State Energy Campus and attendant coal mine in Illinois.

“We are pleased with the outcome of today’s hearing, including the court’s final approval of our DIP financing,” said Peabody President and Chief Executive Officer Glenn Kellow. “This marks another important step as we move through the Chapter 11 process and reposition the company for long-term success.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.