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UPDATE 2-Peabody flags bankruptcy risk after skipping interest payment

Published 2016-03-16, 09:41 a/m
© Reuters.  UPDATE 2-Peabody flags bankruptcy risk after skipping interest payment
WLTGQ
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* Raises doubts about ability to continue as going concern
* Decides to skip a $71.1 mln interest payment on senior
notes
* Shares slump 30 pct

(Adds background)
March 16 (Reuters) - Peabody Energy Corp BTU.N , the
largest U.S. coal producer, said it may have to seek bankruptcy
protection as it did not have enough funds to continue
operations.
Falling demand for coal, tough environmental controls and
cheaper natural gas have pushed several big coal miners,
including industry No. 2 Arch Coal Inc ACIIQ.PK , into
bankruptcy in the past year.
Peabody, which flagged the bankruptcy risk under the "risk
factors" section of a regulatory filing on Wednesday, said it
decided to skip a $71.1 million interest payment on its senior
notes, kicking off a 30-day grace period. (http://1.usa.gov/22jEJnJ)
The company, which had a total debt of $6.3 billion at the
end of 2015, said there was "substantial doubt" about its
ability to continue as a going concern.
Peabody's shares have crashed from their record high of more
than $1,300 in 2008 to $4.01 as of Tuesday's close, reflecting
the downturn in the coal market over the past few years.
The stock was down 30 percent at $2.80 before the opening
bell on Wednesday.
Peabody's lenders are pushing it to restructure its debt
through bankruptcy but the company has also been pursuing bond
exchanges.
As of Dec. 31, the company had cash and cash equivalents of
$261.3 million.
St. Louis-based Peabody's efforts to raise funds through
asset sales hit a roadblock last month. A deal to raise $358
million in cash by selling coal mines in New Mexico and Colorado
was temporarily shelved after the buyer failed to secure
financing.
Fellow coal miner Foresight Energy LP FELP.N said on
Tuesday it may file for Chapter 11 bankruptcy if it does not
reach an out-of-court restructuring agreement with its lenders.
Patriot Coal Corp, which was spun off from Peabody in 2007,
filed for bankruptcy protection in May, just 18 months after
emerging from its previous Chapter 11.
Other coal miners that have filed for protection include
Walter Energy WLTGQ.PK and Alpha Natural Resources Inc
WLTGQ.PK .

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