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Thursday, Oct 10
Patriot Coal eyes Ch. 11 exit after deals with Peabody, Knighthead
- Patriot Coal (PCXCQ.OB) is hoping to emerge from bankruptcy protection by the end of the year after Peabody Energy (BTU) said it would provide $310M to finance the benefits of 3,100 retirees that the latter had agreed to continue covering after it spun off Patriot Coal in October 2007. Peabody had wanted to stop making the payments following Patriot's bankruptcy and a new deal it signed with the United Mine Workers of America (UMWA).
- Peabody will also extend about $140M to Patriot in the form of letters of credit.
- Patriot also reached a settlement with Arch Coal (ACI) in which Arch will provide $5M and the release of a $16M letter of credit posted in its name.
- In addition, Patriot will receive $250M via a rights offering backstopped by Knighthead Capital Management. (PR)