PEABODY ENERGY CORPORATION (OTCMKTS:BTUUQ) Files An 8-K Entry into a Material Definitive Agreement
Item1.01
| Entry into a Material Definitive Agreement |
As previously disclosed, on April13, 2016, Peabody Energy
Corporation, a Delaware corporation (Peabody Energy or the
Company), and a majority of the Companys wholly owned domestic
subsidiaries, as well as one international subsidiary in
Gibraltar (collectively with the Company, the Debtors), filed
voluntary petitions under Chapter 11 of Title 11 of the U.S. Code
(the Bankruptcy Code) in the United States Bankruptcy Court for
the Eastern District of Missouri (the Bankruptcy Court). The
Debtors Chapter 11 cases (collectively, the Chapter 11 Cases) are
being jointly administered under the captionIn re Peabody
Energy Corporation,et al., Case No.16-42529.
Also as previously disclosed, on December22, 2016, the Debtors
filed with the Bankruptcy Court a Joint Plan of Reorganization
under Chapter 11 of the Bankruptcy Code and a related Disclosure
Statement, and on January25, 2017, the Debtors filed with the
Bankruptcy Court the First Amended Joint Plan of Reorganization
and the First Amended Disclosure Statement.
On January27, 2017, the Company and PL Receivables Company, LLC
(PL Receivables) obtained a commitment letter (the Commitment
Letter) from PNC Bank, National Association (PNC), to which, in
connection with the consummation of the proposed Plan, PNC has
agreed to amend the existing securitization facility evidenced by
the Fifth Amended and Restated Receivables Purchase Agreement,
dated as of March25, 2016 (as amended prior to the date hereof),
among PL Receivables, as the seller, the Company, as the
servicer, the sub-servicers party thereto, the various purchasers
and purchaser agents party thereto and PNC, as administrator, in
order to, among other things, (i)increase the purchase limit to
an amount not to exceed $250,000,000 (the Purchase Limit),
(ii)extend the facility termination date, and (iii)consider
adding certain Australian subsidiaries of the Company as
originators (as so amended, the Sixth Amended Securitization
Facility).
The commitment of PNC to provide 50% of the Purchase Limit under
the Sixth Amended Securitization Facility is subject to certain
conditions set forth in the Commitment Letter, including but not
limited to the occurrence or waiver of all conditions precedent
to the effectiveness of the Plan.
The Commitment Letter will terminate upon the occurrence of
certain events described therein. The outside termination date
for the Commitment Letter is May1, 2017.
On January27, 2017, the Debtors filed a motion with the
Bankruptcy Court seeking authorization to enter into and perform
under the Commitment Letter.
The foregoing description of the Commitment Letter is qualified
in its entirety by reference to the Commitment Letter attached
hereto as Exhibit 10.1 and incorporated herein by reference.
| Item7.01 | Regulation FD Disclosure |
Amendments to Plan and Disclosure Statement
On January27, 2017, the Debtors filed with the Bankruptcy Court
the Second Amended Joint Plan of Reorganization (as amended, the
Plan) and the Second Amended Disclosure Statement (as amended,
the Disclosure Statement) to address certain modifications
resulting from a hearing before the United States Bankruptcy
Court for the Eastern District of Missouri on January26, 2017.
Approval of Disclosure Statement
On January27, 2017, solicitation versions of the Plan and the
Disclosure Statement were filed with the Bankruptcy Court. The
Bankruptcy Court is expected to issue an order approving the
Disclosure Statement on January27, 2017. The Bankruptcy Court
also approved the following items and is expected to issue orders
regarding the following, subject to certain modifications:
2
|
authorizing the Debtors to enter into and perform under the Plan Support Agreement, dated as of December22, 2016, by and among the Company and certain of its lenders and noteholders (the Plan Support Agreement); |
|
approving the Private Placement Agreement, dated as of December22, 2016, by among the Company and certain of the Companys creditors (the Private Placement Agreement), as amended by Amendment No.1 to Private Placement Agreement dated as of December28, 2016 (the PPA Amendment); |
|
approving the private placement (the Private Placement) of $750 million in the aggregate of newly created mandatory convertible preferred stock of the reorganized company (Reorganized PEC) to the Private Placement Agreement and in accordance with the Plan; |
|
authorizing the $750 million rights offering to eligible creditors for common stock of Reorganized PEC (the Rights Offering) to be conducted by the Company in accordance with the order, as contemplated by the Plan; |
|
approving the Backstop Commitment Agreement, dated as of December22, 2016, among the Company and certain of its noteholders (the Backstop Commitment Agreement), as amended by Amendment No.1 to Backstop Commitment Agreement dated as of December28, 2016 (the BCA Amendment); and |
|
approving the exit facility commitment letter, dated as of January11, 2017, from Goldman Sachs Bank USA, JPMorgan Chase Bank, N.A., Credit Suisse AG, Credit Suisse Securities (USA) LLC, Macquarie Capital Funding LLC and Macquarie Capital (USA) Inc. (the Exit Facility Commitment Letter). |
The Plan Support Agreement, Private Placement Agreement and
Backstop Commitment Agreement were initially filed with the
Bankruptcy Court on December22, 2016 and previously disclosed
along with the Private Placement and Rights Offering on the
Companys Form 8-K filed with the Securities and Exchange
Commission (the SEC) on December23, 2016. The PPA Amendment and
BCA Amendment were previously disclosed on the Companys Form 8-K
filed with the SEC on December30, 2016. The Exit Facility
Commitment Letter was filed with the Bankruptcy Court on
January11, 2017 and previously disclosed on the Companys Form 8-K
filed with the SEC on January12, 2017.
Copies of the relevant orders and the solicitation versions of
the Plan and Disclosure Statement are available free of charge at
www.kccllc.net/Peabody.
Nothing contained herein is intended to be, nor should it be
construed as, a solicitation for a vote on the Plan. The Plan
will become effective only if it is confirmed by the Bankruptcy
Court. There can be no assurance that the Bankruptcy Court will
confirm the Plan or that the Plan will be implemented
successfully.
Update Regarding Support for Plan and Rights
Offering
The deadline for eligible holders of the Companys senior secured
second lien notes and senior unsecured notes to sign joinders to
the Private Placement Agreement and Backstop Commitment Agreement
was 5:00 p.m. New York City time on January25, 2017. As of that
time, holders of approximately 96.36% of the outstanding
principal amount of the Companys senior secured second lien notes
and approximately 88.72% of the outstanding principal amount of
the Companys senior unsecured notes were parties to each of the
Plan Support Agreement, Private Placement Agreement and Backstop
Commitment Agreement. Holders of approximately 41.65% of the
Companys outstanding first lien debt and approximately 41.18% of
the outstanding principal amount of the Companys unsecured
convertible junior subordinated debentures were parties to the
Plan Support Agreement.
to the Plan, the date of issuance by the Bankruptcy Court of its
order approving the Disclosure Statement will be the record date
for determining the eligibility of a holder of an Allowed Claim
in Class 2A, 2B, 2C, 2D or 5B to participate in the Rights
Offering. to the Rights Offering, holders of Allowed Claims in
2A, 2B, 2C, 2D or 5B on the record date will be entitled to
purchase units comprised of shares of new common stock of
reorganized Peabody Corporation and penny warrants exercisable
into additional shares of new common stock. The allocation of
3
subscription rights available to holders of Allowed Claims in
those classes is set forth in the Plan. Mailing of subscription
materials for the Rights Offering is expected to commence on
February2, 2017 and the Rights Offering is expected to expire on
March2, 2017.
Each holder of the Companys senior secured second lien notes and
senior unsecured notes that is party to the Backstop Commitment
Agreement has agreed to fully exercise all subscription rights
issued to it to the Rights Offering. The subscription rights are
not transferable other than in connection with the underlying
Allowed Claim. In order to exercise subscription rights, holders
of the Companys senior secured second lien notes and senior
unsecured notes held in book-entry form through the facilities of
the Depository Trust Company (DTC) must comply with the
practices, processes and procedures of the DTC, including the
DTCs Automated Tender Offer Program. In addition, holders of the
Companys senior unsecured notes electing to receive its pro rata
share of the Class 5B Cash Pool (as defined in the Plan) will not
be entitled to transfer their senior unsecured notes after making
that election or to participate in the Rights Offering.
The information set forth in and incorporated into this Item7.01
of this Current Report on Form 8-K is being furnished to Item7.01
of Form 8-K and shall not be deemed filed for purposes of
Section18 of the Securities Exchange Act of 1934, as amended, or
otherwise subject to the liabilities of that section, nor shall
it be deemed incorporated by reference into any of Peabody
Energys filings under the Securities Act of 1933, as amended, or
the Securities Exchange Act of 1934, as amended, whether made
before or after the date hereof and regardless of any general
incorporation language in such filings, except to the extent
expressly set forth by specific reference in such a filing. The
filing of this Item7.01 of this Current Report on Form 8-K shall
not be deemed an admission as to the materiality of any
information herein that is required to be disclosed solely by
reason of Regulation FD.
Cautionary Note Regarding Forward-Looking
Statements
This Current Report contains forward-looking statements as that
term is defined in the Private Securities Litigation Reform Act
of 1995. These forward-looking statements include statements that
relate to the intent, beliefs, plans or expectations of Peabody
Energy or its management at the time of this Current Report, as
well as any estimates or projections for the outcome of events
that have not yet occurred at the time of this Current Report.
All statements other than statements of historical fact are
forward-looking statements. Forward-looking statements include
expressions such as believe anticipate, expect, estimate, intend,
may, plan, predict, will and similar terms and expressions. All
forward-looking statements made by Peabody Energy are predictions
and not guarantees of future performance and are subject to
various risks, uncertainties and factors relating to Peabody
Energys operations and business environment, and the progress of
its Chapter 11 Cases, all of which are difficult to predict and
many of which are beyond Peabody Energys control. These risks,
uncertainties and factors could cause Peabody Energys actual
results to differ materially from those matters expressed in or
implied by these forward-looking statements. Such factors
include, but are not limited to: those described under the Risk
Factors section and elsewhere in Peabody Energys most recently
filed Annual Report on Form 10-K and subsequent filings with the
SEC, including its Quarterly Reports on Form 10-Q for the
quarters ended March31, 2016 and June30, 2016, which are
available on Peabody Energys website at www.peabodyenergy.com and
on the SECs website at www.sec.gov, such as unfavorable economic,
financial and business conditions, as well as risks and
uncertainties relating to the Chapter 11 Cases, including, but
not limited to:
| Peabody Energys ability to confirm and consummate the Plan; |
|
Peabody Energys ability to obtain Bankruptcy Court approval with respect to motions or other requests made to the Bankruptcy Court in the Chapter 11 Cases, including maintaining strategic control as debtor-in-possession; |
|
the effects of the Chapter 11 Cases on Peabody Energys operations, including customer, supplier, banking, insurance and other relationships and agreements, and relationships with third parties, regulatory authorities and employees; |
|
Bankruptcy Court rulings in the Chapter 11 Cases, as well as the outcome of all other pending litigation and the outcome of the Chapter 11 Cases in general; |
4
|
the length of time that Peabody Energy will operate under Chapter 11 protection and the continued availability of operating capital during the pendency of the proceedings; |
|
the risks associated with third-party motions in the Chapter 11 Cases, which may interfere with Peabody Energys ability to confirm and consummate the Plan and restructuring generally; |
|
increased advisory costs to execute the Plan and increased administrative and legal costs related to the Chapter 11 Cases and other litigation and the inherent risks involved in a bankruptcy process; |
|
the impact of the New York Stock Exchanges delisting of Peabody Energys common stock on the liquidity and market price of Peabody Energys common stock and on Peabody Energys ability to access the public capital markets; |
|
the likelihood that Peabody Energys common stock will be cancelled and extinguished upon confirmation of the proposed Plan with no payments made to the holders of Peabody Energys common stock; |
|
the volatility of the trading price of Peabody Energys common stock and the absence of correlation between any increases in the trading price and its expectation that the common stock will be cancelled and extinguished upon confirmation of the proposed Plan with no payments made to the holders of Peabody Energys common stock; |
|
Peabody Energys ability to continue as a going concern in the long-term, including Peabody Energys ability to confirm the Plan that restructures Peabody Energys debt obligations to address Peabody Energys liquidity issues and allow emergence from the Chapter 11 Cases; |
|
Peabody Energys ability to maintain adequate debtor-in-possession financing or use cash collateral; |
|
the potential adverse effects of the Chapter 11 Cases on Peabody Energys liquidity, results of operations, or business prospects; |
|
the cost, availability and access to capital and financial markets, including the ability to secure new financing upon and after emerging from the Chapter 11 Cases; |
|
the risk that the Chapter 11 Cases will disrupt or impede Peabody Energys international operations, including the Australian operations; |
and other risks and uncertainties. Forward-looking statements
made by Peabody Energy in this Current Report, or elsewhere,
speak only as of the date on which the statements were made. New
risks and uncertainties arise from time to time, and it is not
possible for Peabody Energy to predict all of these events or how
they may affect it or its anticipated results. Peabody Energy
does not undertake any obligation to publicly update any
forward-looking statements except as may be required by law. In
light of these risks and uncertainties, readers should keep in
mind that the events referenced by any forward-looking statements
made in this Current Report may not occur and should not place
undue reliance on any forward-looking statements.
The Plan provides that Peabody Energy equity securities will be
canceled and extinguished upon confirmation of the Plan by the
Bankruptcy Court, and that the holders thereof would not be
entitled to receive, and would not receive or retain, any
property or interest in property on account of such equity
interests. The Plan also sets forth the proposed recoveries for
Peabody Energys other securities. Trading prices for Peabody
Energys equity or other securities may bear little or no
relationship during the pendency of the Chapter 11 Cases to the
actual recovery, if any, by the holders thereof at the conclusion
of the Chapter 11 Cases. In the event of cancellation of Peabody
Energy equity securities, as contemplated by the Plan, amounts
invested by the holders of such securities would not be
recoverable and such securities would have no value. Accordingly,
Peabody Energy urges caution with respect to existing and future
investments in its equity or other securities.
5
| Item9.01 | Financial Statements and Exhibits |
(d) Exhibits.
|
ExhibitNumber |
Description |
|
| 10.1 | Commitment Letter dated as of January27, 2017 |
6
About PEABODY ENERGY CORPORATION (OTCMKTS:BTUUQ)
Peabody Energy Corporation is a coal company. The Company’s segments include Powder River Basin Mining, Midwestern U.S. Mining, Western U.S. Mining, Australian Metallurgical Mining, Australian Thermal Mining, Trading and Brokerage, and Corporate and Other. Its Powder River Basin Mining operations consist of its mines in Wyoming. Midwestern U.S. Mining operations reflect the Company’s Illinois and Indiana mining operations. Western U.S. Mining operations reflect the aggregation of the New Mexico, Arizona and Colorado mining operations. Australian Metallurgical Mining operations consist of mines in Queensland and New South Wales, Australia. Australian Thermal Mining operations consist of mines in New South Wales, Australia. Its Trading and Brokerage segment engages in the direct and brokered trading of coal and freight-related contracts through the trading and business offices. Its Corporate and Other includes selling and administrative expenses, and corporate hedging activities. PEABODY ENERGY CORPORATION (OTCMKTS:BTUUQ) Recent Trading Information
PEABODY ENERGY CORPORATION (OTCMKTS:BTUUQ) closed its last trading session down -1.08 at 1.77 with 3,485,001 shares trading hands.