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Peabody Energy announces extension to try to salvage Bowie coal mine deal

disclosedMarch 31 that it has extended the closing deadline for its proposed sale ofassets in New Mexico and Colorado to Bowie Resource Partners LLC to allow more time toexplore alternative payment options.

Thedisclosure comes shortly after Bloomberg reported that Bowie's efforts to secure funding for thedeal had fallen through.

Accordingto an 8-K filing, Peabody and subsidiaries of on March30 entered into a limited waiver to purchase and sale agreement, pushing theseller's termination rights back to the end of day April 7 and the same rightsfor the buyer to April 15. During this time, the "parties intend to use thistime to evaluate alternative payment structures which may include cash andnon-cash consideration. The other provisions, terms, and conditions of the purchaseagreement remain unchanged."

Theinitial deal betweenthe two entities was struck in November 2015 and included El Segundo and LeeRanch mines in New Mexico, and the Twentymile mine in Colorado, which have combinedcoal reserves of approximately 330 million tons. The mines are projected toproduce 11 million tons combined in 2016.

InJanuary 2016, Bowie initiated efforts to secure $650 million in financing tohelp fund the transaction.

However,the debt financing deal was put on hold by Bowie in late February, putting the deal indoubt.

TheMarch 30 announcement will allow some additional time for the two entities toresolve the sale.

Theproceeds from the sale are especially important to Peabody, which recentlywarned there issubstantial doubt as to whether the company will be able to continue as a goingconcern and is at risk of a potential Chapter 11 bankruptcy reorganization.