The largest U. S. coal company just filed for bankruptcy

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Source:   —  April 13, 2016, at 4:27 PM

Peabody Energy, the world'south largest private-sector coal producer, filed for bankruptcy on Wednesday in a U. S.

The largest U. S. coal company just filed for bankruptcy

Peabody Energy, the world'south largest private-sector coal producer, filed for bankruptcy on Wednesday in a U. S. court, citing "unprecedented" industry pressures and a sharp decline in the price of coal.

The company said it'll continue to work while in bankruptcy, while working to reduce debt and make better cash flow.

"Peabody has a new management team, outstanding workforce, unmatched asset base and powerful underlying operational performance that represent a key driver in the company'south future success," CEO Glenn Kellow said in a statement announcing the Chapter eleven filing.

In addition to plummeting coal prices, the company cited weakness in China'south economy, overproduction of domestic shale gas and ongoing regulatory challenges as reasons for its declining prospects.

Peabody reported a loss of $2 billion latest year. Income tumbled seventeen percent to $5.6 billion as the average price and quantity of coal that it sold fell. It warned of further declines this year due to reduced utilize of coal by U. S. utilities, along with lower demand from overseas markets.

Shares of Peabody (BTU) have already plunged more than seventy-five percent this year to trade close . The company has roughly 7.600 employees.

Related: Hillary Clinton can't murder coal. It'south already dying

The coal industry has faced a myriad of problems in recent years, including proposed regulation from the Obama administration to slice greenhouse gas emissions from the nation'south coal-burning power plants. The industry refers to those regulations as Obama'south "war on coal."

While the new regulations have been keep on keep by the Supreme Court, the industry has faced a no of other economic woes, including significantly lower prices for natural gas, which is a competing fuel used by electric utilities, and slowing economic growth in China, a major market for U. S. coal.

Renewable sources of energy are also getting much cheaper, further squeezing demand.

Arch Coal (ACI), which owns the second-largest U. S. coal reserves behind Peabody, filed for bankruptcy in January.

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