U.S. coal producer Peabody Energy Corp. said it would seek court approval to repay a $500 million term loan ahead of schedule because it has enough cash to operate in bankruptcy thanks to a rise in coal prices, Reuters reported on Friday. Peabody obtained an $800 million debtor-in-possession or DIP financing from both secured and unsecured creditors when it joined other large U.S. coal producers in bankruptcy in April, hit by a drop in coal prices. The financing included a $500 million term loan, which the company is planning to repay, along with a $200 million bonding accommodation facility for cleanup costs and a letter of credit worth $100 million. Since April there has been a significant increase in the price of both the seaborne thermal and metallurgical coal sold by Peabody, one of the world's leading coal producers. If Peabody repays the term loan before mid-January, its bankruptcy estate will save more than $12 million in interest payments per quarter, the company said in a filing with the U.S. Bankruptcy Court in St. Louis. The court must approve the request.
