Skip to main content
You have permission to edit this article.
Edit
Wyoming coal producer reaches $1.5B deal with creditors
top story

Wyoming coal producer reaches $1.5B deal with creditors

  • Updated
{{featured_button_text}}
Peabody

The North Antelope Rochelle Mine Complex in operation at its location south of Wright in June 2019. The mine's owner, Peabody Energy, has reached a $1.5 billion deal with creditors.

GILLETTE — A St. Louis-based energy company — and the largest thermal coal producer in the Powder River Basin — has announced an agreement with its creditors to refinance $459 million of debt, potentially staving off a second bankruptcy in five years.

The agreement by Peabody Energy Corp. includes all of its revolving lenders and about 65% of its 6% senior secured notes due in 2022, the Gillette News Record reported Monday.

The creditors have agreed to extend the 2022 notes another two years, officials said. Credit lenders also have agreed to convert existing debt into a new loan also due in December 2024.

“We are pleased to have reached a support agreement with a substantial number of our creditors that lays the financial foundation for future success and value creation,” Executive Vice President Mark Spurbeck said.

Support Local Journalism

Your membership makes our reporting possible.
{{featured_button_text}}

The company called the deal a “compromise financing solution” to help give it some financial room to continue operations, CEO Glenn Kellow said. “Closing of the exchange transaction will provide Peabody with the flexibility needed to continue to pursue operational improvements across our operations as well as capture potential seaborne met and thermal market improvements.”

The new capital structure includes $459 million in outstanding principal owed and adds $194 million of new senior secured notes at 10% interest, according to a filing with the Securities and Exchange Commission. A new $324 million letter of credit is also included in the $1.52 billion package.

“This agreement would extend our nearest debt maturity to December 2024, eliminate the restrictive net leverage covenant from our credit agreement and along with the surety collateral standstill, provide a greater line of sight into future liquidity requirements,” Spurbeck said.

The company operates coal production facilities around the United States and Australia, and is the largest thermal coal producer in the Powder River Basin from its three Wyoming mines, including North Antelope Rochelle, Rawhide and Caballo.

The Campbell County mines employ a combined 1,300 people and produced more than 107 million tons of coal last year. This year, the company is estimating at least 23% less production.

For copyright information, check with the distributor of this item, The Gillette (Wyo.) News Record.

0
1
0
0
2

The business news you need

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

Related to this story

Most Popular

Get up-to-the-minute news sent straight to your device.

Topics

News Alerts

Breaking News