Peabody Energy says bankruptcy is possible after skipping interest payments

St. Louis-based Peabody Energy said Wednesday it has skipped interest payments totaling $71.1 million and could be forced to file Chapter 11 bankruptcy.

The world’s largest private coal company said it elected to exercise a 30-day grace period for a $21.1 million semi-annual interest payment on the 6.5 percent senior notes due September 2020 and a $50 million semi-annual interest payment on the 10 percent senior secured second lien notes due March 2022. Both payments were due Tuesday, and Peabody said it would be in default if the payments are not made within 30 days.

The company in recent months has struggled to close the sale of three coal mines in the western United States to Bowie Resource Partners and to renegotiate payment terms with its creditors.

In its filing with the Securities and Exchange Commission, Peabody cites substantial losses and other factors, including “continued uncertainty around global coal fundamentals,” that raise “substantial doubt whether the Company will be able to continue.”

Peabody’s lenders are pushing the company to restructure its debt through bankruptcy but the company has also been pursuing bond exchanges.

Read more: St. Louis Post-Dispatch, St. Louis Business Journal


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