World's Largest Coal company Peabody Energy Files a Declaration of Bankruptcy
Apr 14, 2016 06:47 AM EDT
US largest coal producer Peabody Energy Corp announced it has filed for a bankruptcy protection on Wednesday. According to the coal company, it forced to declare bankruptcy due to an unprecedented industry downturn and debt troubles.
The largest private-sector coal company in the world said it filed for a Chapter 11 bankruptcy protection for the majority of its US entities, in the US Bankruptcy Court for the Eastern District of Missouri, according to Clean Technica. The bankruptcy of St. Louis-based coal company follows the same filings from Arch Coal Inc., Alpha Natural Resources Inc., Patriot Coal Corp. and Walter Energy Inc., all of which have recently sought chapter 11 protection.
Peabody reported it has lost more than$2 billion in stock-market value in 2015, and its stock price has dropped same year, Inside Energy cited. The company also stated on a report in February, a major lender of their company has forced them to file the said declaration.
As of the end of 2015, Peabody has estimated assets worth about $11 billion, and liabilities over $10 billion, Reuters reported. "This process enables us to strengthen liquidity and reduce debt, build upon the significant operational achievements we've made in recent years and lay the foundation for long-term stability and success in the future," Glenn Kellow, the Peabody Chief Executive Officer stated.
The coal company also added, all mines and offices are continuing to operate during the said process, adding that none of its Australian operations is included in the filings. Peabody also said it will receive $800 million in emergency financing, pending for approval in the court.
The Bankruptcy declaration also comes at a production and demand of coal industry in the US, as cheap natural gas has cut into coal's market share. Natural gas and coal produced roughly the same amount of electricity in the U.S.
Peabody has been around for over a century in American industry. It was founded by Francis Peabody in 1883, with $100, a wagon and two mules, according to the company's corporate history.