Largest US coal miner Peabody warns of bankruptcy
- Wired World
- 16 Mar 2016 02:43 (South Africa)
Peabody Energy, the largest US coal miner, warned Wednesday that it may be forced to seek bankruptcy protection after missing a key debt payment.
Just two months after the number-two miner Arch Coal fell into bankruptcy, Peabody said that due to operating losses and negative cash flows, it risked falling into default on its loans.
"We may not have sufficient liquidity to sustain operations and to continue as a going concern," the St. Louis, Missouri-based company said in a securities filing.
"If we are not able to timely, successfully or efficiently implement the strategies that we are pursuing to improve our operating performance and financial position, obtain alternative sources of capital or otherwise meet our liquidity needs, we may need to voluntarily seek protection under Chapter 11 of the US Bankruptcy Code," it said.
The company, like the entire US coal industry, has been hit hard by the plunge in coal prices as energy users from power plants to steel factories turn away to more environmentally friendly, and also very cheap, natural gas and other alternatives.
Around two dozen US coal companies have sought bankruptcy protection or closed in the past three years due to the fall in coal demand.
Peabody's financial weakness has been well-known and the company has sought to lighten its current debt burden in talks with lenders. At least one lender though has been urging the company to enter Chapter 11 bankruptcy for a court-supervised debt restructuring.
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