Peabody Energy looks to repay DIP financing ahead of maturity date

By Caroline Salls

Pittsburgh, Dec. 2 – Peabody Energy Corp. requested court approval to repay its debtor-in-possession financing obligations in full before the scheduled maturity date, according to a motion filed Friday with the U.S. Bankruptcy Court for the Eastern District of Missouri.

The company also asked the court to confirm its continued use of cash collateral after the DIP loan is paid in full.

According to the motion, the performance of Peabody’s business has exceeded projections as a result of unexpected industry supply disruptions supporting a temporary significant increase in the price of seaborne thermal and metallurgical coal.

As of Sept. 30, roughly $500 million in DIP financing obligations remained outstanding and payable.

If it repays these DIP obligations before mid-January, Peabody said its estates will save in excess of $12 million in interest payments per quarter.

“Based upon the debtors’ current cash reserves and market conditions, the debtors have determined that they will have a cash cushion sufficient to operate the debtors’ business during the course of these Chapter 11 cases after the debtors repay the DIP obligations,” the motion said.

A hearing is scheduled for Dec. 14.

Peabody, a St. Louis-based coal producer, filed bankruptcy on April 13, 2016. The Chapter 11 case number is 16-42529.

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