Peabody Energy, the biggest producer of coal in the U.S., announced Wednesday that it may have to seek bankruptcy protection.
The company "had a total debt of $6.3 billion at the end of 2015," Reuters reports, and its "shares have crashed from their record high of more than $1,300 in 2008 to $4.01 as of Tuesday's close, reflecting the downturn in the coal market over the past few years."
"If we are not able to timely, successfully or efficiently implement the strategies that we are pursuing to improve our operating performance and financial position, obtain alternative sources of capital or otherwise meet our liquidity needs, we may need to voluntarily seek protection under Chapter 11 of the U.S. Bankruptcy Code," the company said in a regulatory filing with the Securities and Exchange Commission.
The company also stated that it "skipped a $71.1 million interest payment on its senior notes, kicking off a 30-day grace period," Fortune magazine reports.
The filing also follows a warning by federal regulators last month that Peabody, which is also a member of the American Legislative Exchange Council, may be in violation of mining law. That's because the company continues "to extract coal while failing to meet the criteria for self-bonding," referring to a company's ability to secure its own assets for future mine clean-up rather than posting collateral for those expenses, as the Casper Star Tribune reported.
Peabody "is crashing," according to Jenny Marienau, U.S. divestment campaign manager with 350.org, "because the company was unwilling to change with the times—they doubled down on the dirtiest of all fossil fuels, and investors backed their bet, as the world shifted toward renewable energy."
"Peabody Energy's steep decline toward bankruptcy is a harbinger of the end of the fossil fuel era," she said, adding, "They have consistently put profit over people, and now their profits have plummeted. Our world has no place for companies like Peabody."
SCROLL TO CONTINUE WITH CONTENT
Never Miss a Beat.
Get our best delivered to your inbox.
The climate campaign group also said that Peabody's decline should bolster the fossil fuel divestment movement, because it "is the morally and financially smart thing to do," according to 350.org’s senior global analyst Brett Fleishman.
WildEarthGuardians, a conservation organization based in the American West, offered a similar reaction to Peabody's announcement.
"The writing's on the wall, there is no future for coal," said Jeremy Nichols, WildEarth Guardians' climate and energy program director. "It's time for this country's largest coal company to acknowledge the realities of climate change and the need to keep coal in the ground."
WildEarth Guardians and 350.org joined Greenpeace, Rainforest Action Network, and Missourians Organizing for Reform and Empowerment in sending a letter (pdf) on Wednesday to Peabody head Glenn Kellow urging his company to acknowledge the end of coal, writing, in part:
As we rise to the challenge of confronting climate change, it is clear that we cannot reasonably rely on coal as an energy source. This will necessarily mean that Peabody’s business will come to an end in the long - term. In light of this reality, it is incumbent upon the company to do everything possible in the interim to shed extraneous liabilities, fully close out existing operations, and ensure the concerns of shareholders, workers, tribes and other interested parties are effectively resolved
Writing last month about Peabody's likely step towards bankruptcy, Nick Abraham, editor of Oil Check Northwest, noted that "there has been an unprecedented string of coal company bankruptcies. Over the last 4 years twenty-six companies have gone bankrupt and over 260 mines have shuttered their doors. Arch Coal’s January 2016 chapter 11 filing was the latest and largest company to fall."