Peabody Energy (BTUUQ) Receives Approval for DIP Lenders to Amend Milestones Related to CNTA Issue

October 11, 2016 3:31 PM EDT
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Peabody Energy (OTC: BTUUQ) has obtained approval from required debtor-in-possession (DIP) lenders to amend several milestones related to the time for a decision on what is known as the CNTA issue; the company's deadline for filing of a plan of reorganization/disclosure statement; and the date targeted for court approval of the disclosure statement.

The company also received DIP lender consent to an amendment to the intercompany loan facility related to the Australian platform that allows for the potential sale of some Australian assets. Peabody has stated that its Australian metallurgical and thermal coal platforms remain core to the company, though Peabody is exploring potential sale of selected Australia assets as part of its ongoing plan to optimize its portfolio.

The extension approval recognizes the constructive discussions that have been occurring as part of the Chapter 11 process. The company now will file a related submission for court approval. If granted, the extensions will take the CNTA-decision deadline and the deadline to file an acceptable plan of reorganization/disclosure statement to Nov. 23 and Dec. 14, respectively, from the original DIP financing deadlines of Oct. 11 and Nov. 9. The company would also modify the related deadline for receiving court approval for the disclosure statement to Jan. 31, 2017 from its original date of Jan. 8, 2017.

Peabody has informally discussed the concept with other creditors and received favorable feedback on the extensions. The company intends to use this additional time to expand discussions with key stakeholders around issues that, when resolved, would greatly advance consensus on the company's plan of reorganization. Peabody believes that an extension of these milestone dates is appropriate to provide the best opportunity to bring these discussions to successful conclusion.

Peabody still looks to complete its reorganization within the 12-month period originally contemplated for Chapter 11 cases. Absent meaningful progress in their continuing mediation, the company is not expecting to seek further extensions of the CNTA-decision milestone.

Since filing for Chapter 11 protection in April 2016, the company has completed its business plan, obtained approval on multiple motions regarding the Chapter 11 process and continued to take numerous steps to strengthen the business.



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