Wyoming’s troubled coal firm, Cloud Peak Energy, entered a forbearance agreement with lenders and bondholders Monday, punting default on their debt, and a potential bankruptcy, for another two weeks.
The Powder River Basin coal player chose not to pay a $1.8 million debt payment last month, taking advantage of a 30-day grace period. Monday was the final day before the Gillette-based firm would have defaulted on its debt.
Under the forbearance agreement, Nomura Corporate Research and Asset Management Inc. — the adviser for Cloud Peak’s majority lenders for 2024 notes — will extend leniency for Cloud Peak until May 1, according to a company filing with the Securities and Exchange Commission on Monday.
Cloud Peak is still looking at options to deal with its financial straits, including a bankruptcy, sale or both, it noted in the filing.
“Although this process remains uncertain and fluid, we will need to restructure our balance sheet in order to improve our capital structure, adjust our business to ongoing depressed PRB thermal coal industry conditions, address our significantly reduced liquidity and continue as a going concern,” the company stated in the filing.