The world’s largest private coal company Peabody Energy announced plans to emerge from bankruptcy Thursday. All they need now is a judge to approve them.
“Today’s proposed plan is an important achievement in our path toward emergence,” Glenn Kellow, Peabody’s president and CEO, said in a statement. “The plan charts Peabody’s course forward and reflects an enormous amount of work by the company and multiple creditor groups to advance a proposal that has broad consensus, maximizes the value of the enterprise and paves the way for a sustainable future.”
If a court approves the company’s plan, Peabody will emerge from bankruptcy in the second quarter of 2017. Peabody plans to significantly reduce the company’s pre-filing debt levels by more than $5 billion while offering another $750 million in new stock.
The coal company’s three largest creditors agreed to the plan, and now a bankruptcy court must review the plan. A decision on it is expected sometime in January.
Peabody reported $2 billion in losses in 2015, and the company claimed to only have $900 million on hand. Peabody declared Chapter 11 bankruptcy in April of this year.
It isn’t all good news for the coal company however. Peabody could face problems however from new coal mining regulations enacted by the Obama administration early this month, but President-elect Donald Trump could overturn them.
Environmental groups have long been predicting Peabody’s downfall. Greenpeace, Rainforest Action Network, 350.org, and WildEarth Guardians even sent a letter to the president of Peabody stating that the company “is not viable in the long-term” and urging parties to “take steps to ensure the company undertakes an orderly end to its coal business.”
“The writing’s on the wall, there is no future for coal,” Jeremy Nichols, a Colorado resident and a program director at the green group WildEarth Guardians, said in a news release. “It’s time for Peabody to acknowledge the realities of climate change and the need to keep coal in the ground.”
The entire coal industry has been going through hard times and other American coal companies have faced financial problems too. Arch Coal filed for bankruptcy as well in January and coal companies like Alliance Coal announced mass layoffs.
A 2015 study found the coal industry lost 50,000 jobs from 2008 to 2012 during Obama’s first term. During Obama’s second term, the industry employment in coal mining has fallen by another 33,300 jobs, 10,900 of which occurred in the last year alone, according to federal data. Currently, coal mining employs 69,460 Americans, according to the Bureau of Labor Statistics. Much of the blame for the job losses is directed at federal regulations aimed at preventing global warming, which caused many coal power plants to go bankrupt, resulting in a sharp decline in the price of coal.
Employment has fallen so drastically because coal production has fallen by 15 percent since 2008. Companies were forced by environmental regulations to shut down 400 mines and only opened 103 new mines in the U.S. in 2013, according to the U.S. Energy Information Administration.
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