Peabody, world'south top private coal miner, files for bankruptcy

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Source:   —  April 13, 2016, at 10:42 AM

S. bankruptcy protection on Wednesday in the wake of a sharp fall in coal prices that left it unable to service a recent debt-fueled expansion into Australia.

n">Peabody Energy Corp (), the world'south largest privately owned coal producer, filed for U. S. bankruptcy protection on Wednesday in the wake of a sharp fall in coal prices that left it unable to service a recent debt-fueled expansion into Australia.

The company listed both assets and liabilities in the range of $10 billion to $50 billion, according to a Ct filing. ()

Peabody'south Chapter eleven bankruptcy filing ranks among the largest in the commodities sector since energy and metals prices began to fall in the center of two thousand fourteen as once fast-growing markets such as China and Brazil began to slow.

"This was a challenging decision, but it's the right path forward for Peabody," Chief Executive Officer Glenn Kellow said in a statement. "This process enables us to strengthen liquidity and reduce debt, construct upon the significant operational achievements we've made in recent years and lay the foundation for long-term stability and success in the future."

Peabody has secured $800 million in debtor-in-possession financing from both secured and unsecured creditors, including a $500 million duration loan, $200 million bonding accommodation facility and a letter of credit worth $100 million, the company said in release.

Peabody'south debt troubles date back to its $5.1 billion leveraged buyout of Australia'south Macarthur in two thousand-eleventh, a coveted asset at the time meant to position it as a supplier of metallurgical coal for Asian steel mills.

But as demand for metallurgical coal fell, particularly in China, Peabody'south financial woes intensified. It made a $700 million writedown on its Australian metallurgical coal assets last year.

Producers accounting for about forty-five % of U. S. coal output have filed for bankruptcy in the current industry downturn, based on two thousand-fourteenth government figures.

The case is in the U. S. Bankruptcy Ct for the Eastern District of Missouri, St. Louis, case number 16-42529.

(Reporting by Tracy Rucinski in Chicago and Tom Hals in Wilmington, Delaware; extra reporting by Jessica DiNapoli and Shivam Srivastava; Editing by Sunil Nair)

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