Peabody Energy’s business plan gets approval from DIP lenders

By Sheri Kasprzak

New York, Aug. 10 – Peabody Energy said Wednesday that its debtor-in-possession financing lenders have approved its business plan, which will form the foundation of the company’s reorganization plan.

The company also noted in a statement that the plan reorganization should be submitted before the end of the year.

Over the five-year business plan period, the company expects total sales volumes to rise to 194 million to 197 million tons per year between 2018 and 2021 from 168 million in 2016. Peabody also expects its revenues to be stable at between $4.4 billion and $4.6 billion with its EBITDA and restructuring to rise 60% to 65% from 2016 levels by the end of the plan.

The plan also assumes U.S. coal demand for electricity generation will grow a total of 20 million to 25 million tons between 2016 and 2021 with impacts from announced and expected plant retirements offset by increased capacity utilization at remaining plants. Within Asia and the Pacific, metallurgical coal demand is expected to rise by 50 million to 55 million tons between 2016 and 2021, driven by demand in China and India. Seaborne thermal demand is anticipated to climb by 50 million to 60 million tons.

“We are pleased to advance a realistic plan that recognized both the challenges and opportunities related to the company and industry,” said Peabody chief executive officer Glenn Kellow in a statement.

“As Peabody focuses on emerging stronger from the Chapter 11 process, we look to capitalize on our strengths, build upon our positive operating performance, reduce our overall debt and fixed charges, and pursue additional improvements for long-term success. Peabody has a strong asset base and skilled workforce intent on creating maximum value in an essential industry.”

Currently, Peabody operates mines and mining complexes in eight states and controls 6.3 billion tons of coal reserves in the U.S. and Australian with core sectors including the Powder River Basin, Illinois Basin and Asia-Pacific metallurgical and thermal coal.

Peabody is based in St. Louis.

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