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Court approves Peabody DIP financing facility

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World Coal,

Peabody Energy has received final court approval for its US$800 million debtor-in-possession financing facility, according to a company new release. The approval allows Peabody access to capital to cover day-to-day operating expenses through its Chapter 11 bankruptcy process.

Peabody entered Chapter 11 proceedings last month on the back of a significant fall in demand for coal in the US and global markets. The company bills itself as the largest private-sector coal mining company in the world with assets in the US and Australia.

Its Australian mines are not included in the bankruptcy proceedings and continue to operate as normal, the company said.

A lender group that includes a number of secured lenders and unsecured noteholders has provided the DIP financing. It comprises a US$500 million term loan, a US$200 million bonding accommodation agreement and a cash-collateralised US$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,” said Peabody President and CEO Glenn Kellow.

The court also approved several other motions including the planned sale of Peabody’s interest in the Prairie State Energy Campus, a 1600 MW coal-fired power plant in Illinois, to the Wabash Valley Power Association for US$57 million.

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