World's biggest private coal miner Peabody files for bankruptcy protection in the US

 
Jessica Morris
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The US coal industry has struggled recently (Source: Getty)

The World's biggest private coal producer, Peabody, has been forced to file for bankruptcy protection in the US, amid what it described as a historically difficult business environment.

The move will help it shore up liquidity and whittle down its debt, which was $6.3bn (£4.4bn) at the end of 2015, the firm said as it made a Chapter 11 bankruptcy filing.

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The company's mines and offices will continue to operate, and are expected to continue doing so for the duration of the process.

It comes as low energy prices, a weak Chinese economy, tougher environmental regulations and the rise of US shale gas industry have sparked a wave of bankruptcies across the US coal mining industry recently.

"This was a difficult decision, but it is the right path forward for Peabody. We begin today to build a highly successful global leader for tomorrow," the company's chief executive, Glenn Kellow, said in a statement.

"Through today's action, we will seek an in-court solution to Peabody's substantial debt burden amid a historically challenged industry backdrop."

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"This process enables us to strengthen liquidity and reduce debt, build upon the significant operational achievements we've made in recent years and lay the foundation for long-term stability and success in the future."

Peabody warned of a possible bankruptcy risk last month, saying it had missed a $71m debt repayment, invoking a 30-day grace period at the end of which payments must be made to avoid default.

Peabody has $6.3bn debt at the end of 2015, and posted a $2bn net loss that year.

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