In financial documents filed this week, one of the largest coal companies in the world warned that it may file for bankruptcy, in part, because the company may not be able to make upcoming debt payments.
Just this week, Peabody Energy missed around $70 million dollars worth of interest payments and instead chose to take advantage of a 30-day grace period.
“As a result of operating losses and negative cash flows from operations and our election to exercise a 30-day grace period with respect to certain interest payments…we may not have sufficient liquidity to sustain operations,” Peabody wrote in the filing.
The company is in negotiations with its lenders on debt payments, and is attempting to reduce its liabilities by selling mines in New Mexico and Colorado. But these deals could fall through.
“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,” Peabody wrote.
Peabody is not the only coal company in financial trouble. Both Arch Coal and Alpha Natural Resources have declared bankruptcy over the past year.
