Remember meForgot password?
    Log in with Twitter

article imageWorld's largest coal company may file for Chapter 11 Bankruptcy

By Karen Graham     Mar 21, 2016 in Business
Peabody Energy Corporation, the world's largest coal mining company will soon be filing for bankruptcy protection as it continues to struggle to keep up with debt payments.
In a filing with the Securities and Exchange Commission last week, the company submitted a form 10-K, stating that a decreasing demand for coal and stiffer regulations have raised doubts as to the company's ability to operate outside the protection of bankruptcy.
On Wednesday last week, the New York Times reports, Peabody stock closed at a six-month low of $2.19 a share, a 46 percent drop. In a statement, Peabody said: “If we are not able to timely, successfully or efficiently implement the strategies that we are pursuing to improve our operating performance and financial position, obtain alternative sources of capital or otherwise meet our liquidity needs, we may need to voluntarily seek protection under Chapter 11 of the U.S. Bankruptcy Code."
Coal Industry facing tough times
For months, there was fear that Peabody would end up following other major coal companies, including both Arch Coal, Patriot Coal Corporation, and Alpha Natural Resources. All three companies ended up filing for Chapter 11 bankruptcy, according to EcoWatch.
Another coal-mining giant, Foresight Energy, appears to be headed for the same fate because like Peabody, it also filed a form 10-K with the SEC. In the filing, Foresight Energy also pointed to debt payments and an inability to operate without financial help.
Foresight Energy's stock closed down at $1.62 a share on the release of the SEC filing, even lower than Peabody's shares, and about 26 percent lower. The future is not looking good for coal companies due to the number of regulations they have been hit with over the last few years, as well as competition from alternate energy sources.
Peabody, in a press release, cited the "atrocious" coal market conditions, with the price of a ton of coal stagnating at $40 a ton, down from $200 a ton in 2008. The company also pointed to its "dual objectives of preserving liquidity and reducing debt."
Amanda Starbuck, program director at Rainforest Action Network said, “As a corporation, Peabody practiced bad business all around—with poor strategic choices, abysmal treatment of its workers, gross negligence in communities where it operated and consistent denial of climate science.”
More about Peabody energy, Chapter 11 Bankruptcy, debt payments, coal industry, tighter regulations
More news from
Latest News
Top News