Peabody approved for additional financing
May 18, 2016
Steamboat Springs — Debt-ridden Peabody Energy, owner of Twentymile Mine in Routt County, is hoping additional money will allow the company to continue operations as normal.
During a Tuesday hearing, Peabody received final approval from the U.S. Bankruptcy Court for the Eastern District of Missouri for $800 million in financing.
The financing is called debtor-in-possession financing, or DIP. Typically, DIP financial lenders are given priority in being paid back.
The money will come from a lender group that includes secured lenders and unsecured noteholders, according to a news release. It includes a $500 million term loan, a $200 million bonding accommodation and a cash-collateralized $100 million letter of credit facility.
“We are pleased with the outcome of today’s hearing, including the court’s final approval of our DIP financing,” Peabody President and Chief Executive Officer Glenn Kellow said in the news release. “This marks another important step as we move through the Chapter 11 process and reposition the company for long-term success.”
Peabody, the biggest mining company in the United States, has been strapped by a $6.2 billion debt it could no longer make payments on. Despite that, the company claims all of its American mining operations are cash-flow positive.
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The company declared bankruptcy April 13.
Twentymile employs about 300 people, and Peabody officials have stated that, upon court approval, employees would continue to receive normal wages and salaries, health care coverage and other benefits.
"I want to reinforce up front that, during this process, we expect to continue to do what we do best: mining coal, loading trains, restoring lands and maintaining our activities in a largely business-as-usual fashion across our U.S operations," Peabody's director of state government relations, Mike Blank, wrote in an April 13 email to State Rep. Diane Mitsch Bush.