The settlement deals, which it called “superpriority” agreements, will allow the trio of states where it currently has self-bonding obligations to receive cash first in priority up to its self-bonding facility of $200 million.
Each state is entitled to a percentage of that amount, based on a proportion of self-bonding relative to what Peabody’s total obligations were on April 12, when it first filed for bankruptcy.
The debtor-in-possession financing of $800 million approved for the company earlier this year provides financing for up to 18 months as it continues the Chapter 11 process.
According to Reuters, that equates to 15% of Peabody’s $1.2 billion total self-bonding. Wyoming can receive $127 million; New Mexico, $32 million; and Indiana, $17 million, should the mines in those states go into reclamation while it is in bankruptcy.
“Peabody is continuing our actions to restore coal mined lands using best-in-class practices, and we are committed to our reclamation as we have been for decades,” Peabody President-Americas Kemal Williamson said. “We are pleased to reach agreements that provide additional security toward our reclamation obligations and look forward to ongoing discussions regarding Peabody’s reclamation bonding long term.”
Officials said that, in addition to the states’ financial assurances, it will conduct quarterly reclamation activity status meetings and target outstanding bond reductions in the states where the deal has been made.
The deals must be approved by a bankruptcy judge. Motions for those will be heard in August.