Peabody Energy filed with the U.S. Bankruptcy Court a Joint Chapter 11 Plan of Reorganization and related Disclosure Statement.
According to the Disclosure Statement, “The Restructuring contemplated by the Plan will reduce the Debtors’ debt burden by over $6.6 billion, a necessary step for the Company’s financial health given the volatile industry in which the Company operates. The Plan will provide creditors with recoveries, funded in large part by a $1.5 billion first lien exit facility, subject to being upsized as described herein, a $750 million rights offering available to holders of Allowed Second Lien Notes Claims in Class 2 and Allowed General Unsecured Claims in Class 5B (General Unsecured Claims against the Encumbered Guarantor Debtors)8 as of the Record Date9 and a $750 million direct investment (the ‘Private Placement’) by the Noteholder Co-Proponents and certain additional creditors who become party to the Rights Offering Backstop Commitment Agreement10 and the Private Placement Agreement.”
In addition, “The First Lien Lender Co-Proponents have agreed that holders of First Lien Lender Claims will backstop the Exit Facility to ensure consummation of the Plan by agreeing to take up to $1.5 billion in take-back paper (the ‘Replacement Secured First Lien Term Loan’)….Similarly, the Ad Hoc Group of Second Lien Noteholders has agreed that, in the Debtors’ sole discretion, in partial satisfaction of their Claims, the Second Lien Noteholders may receive $450 million in cash, $450 million of first lien debt on the same terms as the Exit Facility (the ‘Additional First Lien Debt’) or $450 million of new second lien notes (the ‘New Second Lien Notes’) on the material terms and conditions set forth on Exhibit I.A.140. to the Plan. Finally, the Noteholder Co-Proponents and other parties to the Rights Offering Backstop Commitment Agreement have agreed to backstop the $750 million Rights Offering and invest through the $750 million Private Placement in order to ensure that the Debtors raise the $1.5 billion that will be necessary to consummate the Plan. These significant financial contributions from these large creditor constituencies are part of the Global Settlement, and the Global Settlement serves as the cornerstone of the Plan.”
The Court scheduled a January 26, 2017 hearing to consider the Disclosure Statement with a March 16, 2017 Plan hearing to follow.
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