In a series of disclosures Jan. 30, Peabody Energy Corp. outlined its financial, corporate and production positions that are designed to better navigate the coal industry's market cycles, ahead of an expected emergence from bankruptcy protection.
The company disclosed preliminary estimated results estimating EBITDAR, a measure that includes restructuring items, of between $676 million and $696 million.
The preliminary estimates are based on 187 million tons of coal sold, resulting in roughly $4.7 billion in revenues. The results were released in connection with the financings contemplated by Peabody's exit facility commitment letter and its bankruptcy restructuring plan and were not audited by an independent registered public accounting firm.
Peabody also disclosed a presentation that is being shared with potential lenders related to a senior secured term loan financing transaction. The presentation points out that the transaction will reduce Peabody's balance sheet debt burden by over $5 billion compared to the third quarter of 2016. The existing second lien and unsecured creditors anticipate owning a majority of the company post-emergence.
The exit financing would give Peabody "significant debt maturity runway" with no post-emergence debt maturities coming due until 2022. The "New Peabody" will focus and build from an "excellent" operating base, an experienced management team and a "commitment to lasting values," according to the presentation. Peabody noted that after major improvements expected across company, industry and capital structure post-emergence, the organization should have a capital structure designed to be more sustainable through various coal market cycles.
The company projects long-term utility coal demand in the U.S. to remain relatively consistent through 2021. Peabody also projects seaborne thermal and metallurgical coal demand will grow through 2021.
Peabody is also hoping for changes from a new presidential administration and Congress. The company, the largest private-sector coal mining company in the world, said it sees a commitment to coal and sees a potential for major regulatory changes that could benefit the industry.