Peabody Energy Corp., the world’s largest private sector coal producer, said Thursday that it expected to exit its Chapter 11 bankruptcy in early April after a U.S. judge said he would approve its plan to slash more than $5 billion of debt.
U.S. Bankruptcy Judge Barry Schermer said he was ready to sign an order to approve Peabody’s bankruptcy emergence once language regarding a late settlement of certain U.S. Department of Justice complaints had been finalized.
St. Louis-based Peabody will leave bankruptcy amid dramatically improved short-term prospects for its business compared with a year ago, when it sought Chapter 11 protection.
The reorganization plan, which will repay secured lenders in full, received overwhelming support from its creditors.
Peabody’s plan is being financed through a $1.5 billion sale of stock, consisting of a $750 million rights offering available to bondholders and a $750 million private placement of preferred equity for institutional investors.
A small group of asset managers opposed the plan because they said it was proposed in bad faith and attacked the private placement for enriching the select funds that helped negotiate the company’s bankruptcy plan.
Read more: St. Louis Post-Dispatch