Cloud Peak Energy has secured what appears to be its last forbearance on a $1.8 million loan payment the coal company chose not to pay in March, sparking expectations of a pending bankruptcy.
The company disclosed Wednesday in a filing with the Securities and Exchange Commission that it had reached an agreement with the firm that holds the majority of Cloud Peak’s unpaid debt that it would have until the end of Friday to pay that debt or go into default.
The news comes on the heels of a Wall Street Journal report Tuesday, in which an unnamed source familiar with the company’s choices said Cloud Peak intends to file for bankruptcy by the end of this week.
The three-day extension announced Wednesday is the third forbearance Cloud Peak has received, in addition to the primary 30-day grace period after Cloud Peak did not make its debt payment March 15. Each period has been shorter, from a two-week extension, to a one-week extension and now a few days.
Election not to make debt payments preceded the bankruptcy filings of Arch Coal and Peabody Energy when those firms filed for bankruptcy in 2016.
Cloud Peak has shown signs of distress for some time, with warnings of financial insecurity accelerating over the last year from thin margins on coal production to elimination of health benefits for retirees and staff cuts.
The New York Stock Exchange suspended the company from trading due to ongoing poor price performance.
Cloud Peak owns the Antelope, Cordero Rojo and Spring Creek mines in Wyoming and Montana. Cloud Peak mines represent 20 percent of the Wyoming coal miners in the Powder River Basin.