Peabody disclosure statement approved; plan voting to start

New York, Jan. 26 – Peabody Energy said that the disclosure statement for its plan of reorganization was approved by the U.S. Bankruptcy Court for the Eastern District of Missouri.

The company will now start soliciting votes from creditors, according to a news release.

Votes must be submitted by 6 p.m. ET on March 3.

A confirmation hearing is scheduled for March 16.

The court also approved the company’s plan support agreement and other related agreements.

Peabody said that approval reflects “a broad consensus” amount its largest creditors.

To provide funding for its exit from bankruptcy the company will raise $1.5 billion of equity through a backstopped $750 million rights offering and a $750 million private placement of mandatorily convertible preferred stock and enter into exit debt financings, for which it has commitments.

As previously reported, Peabody has a commitment letter from Goldman Sachs Bank USA, JPMorgan Chase Bank, NA, Credit Suisse AG and Credit Suisse Securities (USA) LLC as arrangers, Macquarie Capital Funding LLC and Macquarie Capital (USA) Inc. for a five-year senior secured term loan for an amount equal to $1.5 billion less the amount of any privately placed debt securities issued before the closing date. The facility allows for incremental term loans totaling up to $300 million.

Under the plan of reorganization, current Peabody Energy equity securities will be cancelled, and holders will receive no distribution.

Contingent debtor-in-possession facility surviving claims will be preserved and, if allowed, paid in full in cash.

Securitization facility claims will be satisfied in the ordinary course of business or paid in full in cash.

Holders of first-lien lender claims will be paid in full in cash, including interest at the default rate, or, to the extent the company does not receive a commitment for at least $1.5 billion in exit financing, a replacement secured first-lien term loan and cash.

Holders of second-lien notes claims will receive, at the option of the Peabody debtors, a share of $450 million in any combination of cash, additional first-lien debtor or new second-lien notes, a share of a common stock split and a share of a rights offering equity rights split.

Holders of general unsecured claims against encumbered debtors will receive a share of the common stock split and the rights offering equity rights split.

Holders of unsecured debenture claims will receive no distribution until holders of general unsecured claims are paid in full.

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

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