Peabody reaches a superpriority settlement for coal mine restoration
Peabody Energy has reached agreement with the Illinois State Department of Natural Resources regarding financial assurances in support of coal mine restoration.
The company has reached a superpriority settlement agreement with Illinois, a state in which Peabody has self-bonding obligations. The agreement follows agreements with Wyoming, New Mexico and Indiana that were approved by the bankruptcy court on 17 August 2016.
The superpriority agreements provide the relevant state authorities with the ability to receive cash first in priority as additional assurance for Peabody's performance before distribution to any lender or other pre-petition creditor, up to the full amount of the company's US$200 million bonding accommodation facility.
Illinois and the three other states are entitled to a percentage of the company's US$200 million bonding accommodation facility based on their proportion of self-bonding relative to the company's total obligation as of 12 April 2016. The motion for the Illinois agreement is expected to be heard by the court by 15 September 2016 and is available online.
Peabody's US$800 million Debtor-in-Possession financing facility, which includes the bonding accommodation facility, provides financing for up to 18 months during the Chapter 11 process as described further in the company's SEC filings on Form 8-K on 13 April and 24 May 2016.
Land restoration is an essential part of the coal mining process. Over the past decade, Peabody has spent approximately US$185 million to restore 48 000 acres. As of 30 June, the company had approximately US$1.14 billion of self-bonding and US$320 million of surety bonds supporting reclamation activities outstanding.
Peabody has three opencast and underground operations in Illinois that employ approximately 500 workers and injected more than US$715 million into the region in direct and indirect economic benefits last year.
Read the article online at: https://www.worldcoal.com/mining/23082016/peabody-reaches-a-superpriority-settlement-with-illinois-2288/
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