https://www.miningweekly.com

Peabody faces year-end deadline for deal with lenders and noteholders

10th November 2020

By: Mariaan Webb

Creamer Media Senior Deputy Editor Online

     

Font size: - +

Top coal miner Peabody Energy on Monday flagged fresh bankruptcy risks, with the company in talks with lenders to avert a violation on terms of its debt.

The St Louis-based coal producer warned that its fourth-quarter results would not be sufficient to meet the minimum required net leverage ratio as defined under a revolving credit agreement.

Peabody said it was in discussions with its revolving credit lenders and an ad hoc group of 2022 noteholders and that it had until December 31 to complete a deal.

The lossmaking coal producer has agreed a standstill with its surety bond providers for its $1.6-billion surety programme to resolve about $800-million of collateral requests made in the third quarter and to limit future collateral requirements.

“We are grateful for the tremendous collaboration with our surety providers to reach a first-of-its-kind solution that offers a greater line of sight into Peabody’s future collateral requirements,” said executive VP and CFO Mark Spurbeck.

“The agreement lays the foundation for stability and provides the necessary support for our longstanding commitment to reclamation. We are now focused on continuing to work with our 2022 noteholders and revolving credit lenders to effectuate a holistic transaction that provides for maturity extensions and covenant relief, while maintaining sufficient operating liquidity and financial flexibility.”

Peabody posted a quarterly loss of $67.2-million, or $0.66 a share. Third-quarter revenues declined 39% from the prior year to $671-million, owing to lower volumes, mix changes and weaker seaborne pricing. 

During the quarter, the seaborne thermal segment shipped 4.6-million tons, with 2.7-million tons exported at an average realised price of $45.86/t. The remaining 1.9-million tons were sold under a long-term domestic contract.   

Seaborne thermal segment costs per ton of $27.59 improved 22% compared with the prior year owing to strong cost performance from the Wambo surface mine and Wilpinjong. Lower ratio and improved geology contributed to significantly lower year-over-year costs at the surface operations. 

In the quarter, the seaborne met segment shipped 1.1-million tons at an average realised price of $71.88/t. Compared with the prior year, third quarter 2020 realised pricing was impacted by lower pricing and a higher mix of PCI sales. 

Seaborne met costs per ton, excluding prior year North Goonyella equipment and development costs, improved 15% from the prior year to $96.87. Lower costs per ton were driven by ongoing actions to improve the cost structure at Metropolitan, Coppabella and Moorvale. 

Peabody said its US thermal mines delivered strong cost performance driven by optimising the company's maintenance programme through use of condition-based monitoring. 

Edited by Creamer Media Reporter

Comments

The content you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION