Who is not getting paid? Lowly investors, no doubt. Hope you didn't have much coal stock. 2008 was bad enough for your portfolio.The nation's biggest coal company, Peabody Energy (BTU), filed for Chapter 11 bankruptcy protection on Wednesday as the coal industry grapples with the fallout of low natural gas prices, costly regulations and legacy costs.
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The company also suffered a sharp blow from its exposure to the bankruptcy of former subsidiary Patriot Coal, one of several coal giants to topple into bankruptcy court over the last couple years.
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Peabody has posted four consecutive yearly losses, including a $2 billion loss in 2015 as revenue fell 17% to $5.6 billion.
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"Through this process, the company intends to reduce its overall debt level, lower fixed charges, improve operating cash flow and position the company for long-term success, while continuing to operate under the protection of the court process," Peabody said Wednesday in a statement.
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Peabody said it had secured $800 million in bankruptcy financing from a group that includes secured and unsecured creditors to maintain operations.
USA Today
And, of course, there are the coal miners.
September 2015:
Bankruptcy 101: a primer for US coal marketsClimate hawks have been gleeful over the trend of big U.S. coal companies filing for bankruptcy. Patriot Coal filed for Chapter 11 in May, Walter Energy sought protection in July, and Alpha Natural Resources succumbed in August.
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While some mines are being idled, they’re not being shuttered en masse. The financial failure of many coal companies, by itself, won’t necessarily bring about a low-carbon future—and for particularly Americans reasons.
Unless activists acquire coal mines on the cheap out of bankruptcy and permanently shutter them, a series of bankruptcies alone will not lead to sharply reduced coal mining. [...]
Once a company files for bankruptcy protection, a robust and highly functional industry—courts, judges, lawyers, consultants, specialized lenders, distressed debt investors—kicks into gear to ensure that companies with valuable assets keep operating until new owners can be found for the whole business or for parts of it.
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Going forward, coal will continue to be mined at the rate the global market demands—just under a different capital structure. And the new owners will have the same incentives as the old owners to fight regulations and lobby against emission standards.
Slate
"Mr. Peabody's coal train has hauled it away..."
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