Peabody completes milestone in emergence from Chapter 11
Peabody has filed its plan of reorganization and disclosure statement with the U.S. Bankruptcy Court for the Eastern District of Missouri, representing another milestone in the company's Chapter 11 process. The plan of reorganization and disclosure statement establish proposed recoveries for key stakeholders and outline other components of the company's future governance and ownership. The proposed plan provides for a new capital structure that reduces the pre-filing debt levels by more than $5B, lowers fixed charges and recapitalizes the company through a backstopped rights offering of $750M, a private placement of mandatorily convertible preferred stock of $750M and the issuance of new common stock to satisfy certain creditor claims. Three key stakeholder groups reached agreement with the company on a framework that culminated in the plan of reorganization. Peabody currently expects to have a hearing on the disclosure statement on Jan. 26, 2017. Following court approval, Peabody intends to send the plan and disclosure statement to creditors for approval. Peabody is targeting emergence around the beginning of 2Q17, and anticipates emerging as a public company. The plan provides that current Peabody Energy equity securities will be cancelled and extinguished upon the effective date of a confirmed plan of reorganization by the bankruptcy court, and holders would not receive any value for such equity interests. The plan also provides for a nine-member board of directors. Directors from the existing Peabody board will be considered as part of the search process.