Peabody admits bankruptcy may be in its future
Peabody Energy says it may have to file for bankruptcy.
The St. Louis-based coal company filed a report with the Securities and Exchange Commission on Wednesday.
The nation’s largest coal producer has been attempting to restructure its debt for months. In the regulatory filing Peabody Energy said if those efforts fall short it may need to seek bankruptcy protection.
The company failed to pay about $71 million in interest payments due Tuesday and said it would exercise a 30-day grace period. Peabody borrowed about $945 million last month, maxing out its credit line.
In a letter sent to employees, Peabody's Executive Vice President and CFO Amy Schwetz said the company would use the grace period to continue conversations with lenders. She said it would have "no effect on day-to-day operations."
Within the last year several of the largest coal companies in the U.S. have filed for bankruptcy, including St. Louis-based Arch Coal, Patriot Coal and Alpha Natural Resources.
The coal industry has been hurt in recent years by lower natural gas prices, less demand from China and stricter environmental regulations.
Read more about what a Peabody bankruptcy might look like here.
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