Tracy Rucinski reports that a U.S. judge formally approved Peabody Energy Corp plan to emerge from bankruptcy late Friday after the coal producer struck a settlement with the U.S. government over legacy environmental claims at a gold and metal mining subsidiary.
Under a last-minute deal with the U.S. Department of Justice, Peabody agreed to create a $43 million trust to manage environmental liabilities stemming from its dormant Gold Fields Mining subsidiary, according to court papers.
This is a great day for Peabody and, more importantly, our multiple stakeholders who benefit from the many products and services we provide, Peabody spokesman Vic Svec said on Saturday. St. Louis-based Peabody, the world largest private-sector coal producer, owns mines in Australia and the U.S., and supplies the global market with the metallurgical coal used in steelmaking and the thermal coal used to generate electricity.
Peabody expects to exit bankruptcy in early April with about $2 billion of debt amid dramatically improved short-term prospects for its business versus a year ago, when it sought Chapter 11 protection with more than $8 billion of debt.
In the environmental settlement, the Department of Justice was negotiating on behalf of the EPA, the Interior Department, five states and seven Indian tribes. The parties filed claims worth billions of dollars, which Peabody disputed but said it agreed to settle to avoid drawn-out litigation. Peabody agreed earlier in March to cover about $1 billion in future coal mine cleanup costs with third-party bonds.
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