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Court approves Peabody first-day motions

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World Coal,

The bankruptcy court has approved Peabody’s first-day motions to allow the company to continue to pay employees and its service providers through its Chapter 11 process. The court also approved on an interim basis the US$800 million debtor-in-possession (DIP) financing facilities by a lender group led by Citigroup.

The DIP financing includes a US$500 million term loan of which US$200 million is available immediately, a US$200 million bonding accommodation facility and a cash-collateralised US$100 million letter of credit facility.

“We are pleased with this first positive step forward in our Chapter 11 process and the support we have received since out filing from our employees, customers, suppliers and many other stakeholders has been highly encouraging,” said Peabody President and CEO, Glenn Kellow.

The bankruptcy proceedings include the companies US operations. Its Australian businesses are not included in the filings and are continuing as usual.

The company announced it was entering Chapter 11 bankruptcy proceedings on 13 April. Further hearings will be held in May to issue the final orders regarding the company’s first-day motions, including final approval of the DIP financing.

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