Peabody Energy Corp., the world's largest private sector coal producer, stood by its current bankruptcy exit plan, saying yesterday in court papers that alternative proposals threatened to send the company back into chapter 11, Reuters reported. Peabody's plan to slash $5 billion of debt has the support of the vast majority of its creditors but is opposed by Indiana, Missouri, environmental groups and certain former employees, creditors and shareholders. A small committee of objecting creditors has sent Peabody a series of alternative proposals to its own plan, which calls for the coal producer to emerge from bankruptcy in April with about $2 billion in debt. In a filing with the U.S. Bankruptcy Court in St. Louis, Lazard's Tyler Cowan, who has been advising Peabody on its restructuring, said the alternative plans contained "major flaws" in terms of valuation, debt capacity and feasibility. Given the "cyclical and volatile nature" of the coal industry, Cowan said that Peabody's debt should not exceed $2 billion given a long list of risks including China's coal policy, U.S. natural gas prices, and financing for environmental cleanup and retirement obligations.
