ST. LOUIS, Jan. 21, 2016 /PRNewswire/ -- Peabody Energy
(NYSE: BTU) announced today that it has entered into a definitive
agreement to sell the subsidiary holding its 5.06 percent share of
the Prairie State Energy Campus to the Wabash Valley Power
Association for $57 million, subject
to certain customary closing adjustments.
The definitive agreement was entered into following a
competitive bidding process Peabody launched in the fourth quarter
of 2015 as part of the company's emphasis on portfolio optimization
and sale of non-core assets.
Prairie State is a 1,600 megawatt coal-fueled electricity
generation plant and adjacent coal mine in Washington, St.
Clair and Randolph counties
in Illinois, which commenced
operations in 2012. It is one of the cleanest coal-fueled
plants in the nation and the lowest-cost coal plant in one of the
world's largest energy and operating reserve markets.
Closing on the transaction is anticipated to occur before the
end of the second quarter of 2016, subject to certain governmental
and regulatory approvals, expiration of purchase rights and other
customary conditions. Peabody expects to use transaction
proceeds for general corporate purposes and/or deleveraging
activities, and expects to record a modest gain related to the
sale.
The sale is the latest in a series of actions to reshape
Peabody's portfolio and increase proceeds through sales of non-core
assets. The planned sale of the Prairie State interest, along
with other recently announced or enacted transactions, would bring
total proceeds from asset sales to nearly $500 million since the beginning of the second
quarter of 2015.
In the fourth quarter, Peabody entered into a definitive
agreement to sell its New Mexico
and Colorado assets for
$358 million in cash. The
transaction would bring forward multiple years of cash flows and
release the company of approximately $105
million of liabilities. The sale recently received
Hart-Scott-Rodino regulatory approval, the purchaser is currently
arranging for financing, and closing is expected within the first
quarter.
The company's planned completion of the sale of the Wilkie Creek
Mine and other associated assets in Queensland's Surat Basin has been delayed and
remains highly dependent on successful financing by the proposed
purchaser.
During the last three quarters of 2015, the company realized
cash proceeds of nearly $70 million
related to its ongoing resource management activities through the
sale of surplus land and coal reserves.
Peabody continues to evaluate its portfolio to target the best
market base, with a filter that includes strategic fit, value
consideration, growth and cash requirements as the company turns
greater focus on its core mining assets in the Powder River Basin,
Illinois Basin and
Australia.
Peabody Energy is the world's largest private-sector coal
company and a global leader in sustainable mining, energy access
and clean coal solutions. The company serves metallurgical and
thermal coal customers in more than 25 countries on six continents.
For further information, visit PeabodyEnergy.com and
AdvancedEnergyForLife.com.
Certain statements in this press release are forward-looking as
defined in the Private Securities Litigation Reform Act of 1995.
The company uses words such as "anticipate," "believe," "expect,"
"may," "forecast," "project," "should," "estimate," "plan,"
"outlook," "target," "likely," "will," "to be" or other similar
words to identify forward-looking statements. These forward-looking
statements are based on numerous assumptions that the company
believes are reasonable, but they are open to a wide range of
uncertainties and business risks that may cause actual results to
differ materially from expectations as of Jan. 21, 2016. These factors are difficult
to accurately predict and may be beyond the company's control. The
company does not undertake to update its forward-looking
statements. Factors that could affect the company's results
include, but are not limited to: supply and demand for the
company's coal products; price volatility and customer procurement
practices, particularly in international seaborne products and in
the company's trading and brokerage businesses; impact of
alternative energy sources, including, but not limited to, natural
gas and renewables; global steel demand and the downstream impact
on metallurgical coal prices; the ability to successfully complete
the sale of the company's New
Mexico and Colorado coal
assets to Bowie; the ability to successfully complete asset sales
of other assets; impact of weather and natural disasters on demand,
production and transportation; reductions and/or deferrals of
purchases by major customers and the company's ability to renew
sales contracts; credit and performance risks associated with
customers, suppliers, contract miners, co-shippers, and trading,
banks and other financial counterparties; geologic, equipment,
permitting, site access, operational risks and new technologies
related to mining; transportation availability, performance and
costs; availability, timing of delivery and costs of key supplies,
capital equipment or commodities such as diesel fuel, steel,
explosives and tires; impact of take-or-pay agreements for rail and
port commitments for the delivery of coal; successful
implementation of business strategies, including, without
limitation, the actions we are implementing to improve our
organization and respond to current market conditions; negotiation
of labor contracts, employee relations and workforce availability;
changes in postretirement benefit and pension obligations and their
related funding requirements; replacement and development of coal
reserves; adequate liquidity to operate the business; the cost,
availability and access to capital and financial markets; ability
to appropriately secure the company's obligations for reclamation,
federal and state workers' compensation, federal coal leases and
other obligations related to our operations, including our ability
to remain eligible for self-bonding and/or successfully access the
commercial surety market; impacts of the degree to which we are
leveraged and our ability to comply with financial and other
restrictive covenants in our credit agreement; effects of changes
in interest rates and currency exchange rates (primarily the
Australian dollar); effects of acquisitions or divestitures;
economic strength and political stability of countries in which the
company has operations or serves customers; legislation,
regulations and court decisions or other government actions,
including, but not limited to, new environmental and mine safety
requirements, changes in income tax regulations, sales-related
royalties, or other regulatory taxes and changes in derivative laws
and regulations; litigation, including, but not limited to, claims
not yet assets; any additional liabilities or obligations that we
may have as a result of the Patriot Coal bankruptcy, including,
without limitation, as a result of litigation filed by third
parties in relation to that bankruptcy; terrorist attacks or
security threats, including, but not limited to, cybersecurity
threats; impacts of pandemic illnesses; and other risks detailed in
the company's reports filed with the Securities and Exchange
Commission.
CONTACT:
Beth Sutton
(928) 699-8243
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SOURCE Peabody Energy