Cloud Peak Energy has worked with debt holders to secure its third extension on a $1.8 million interest payment on a debt that's due in 2024. The long-struggling Powder River Basin coal producer extended the termination date of an agreement to pay part of its debt to May 7. A default on the payment would likely trigger a Chapter 11 bankruptcy filing.
Cloud Peak also postponed a $17.4 million interest payment that was due today for its 2021 debt. It now has a 30-day grace period to pay that.
Andy Blumenfeld, the head of market analytics for Doyle Trading Partners, said the extension isn't surprising, and might mean the company is working on a creative way to improve its position. Blumenfeld said, for that reason, there could be more extensions down the line, "as long as there are active discussions, [as] I think sort of is indicated by this. Otherwise I really have a hard time figuring out exactly why that why they would delay it further."
Blumenfeld said it would just be speculation as to what kind of discussion is going on.
"It could be that they're hoping against all hope perhaps or something that something will happen in terms of somebody, a white knight as it were coming in to save the day. It could be that they're still trying to work things out with their creditors and set up some kind of a structured agreement," he said.
In its federal filing, Cloud Peak wrote it still remains in discussions regarding asset sales, debt restructuring, and which transactions could take place under a Chapter 11 bankruptcy filing.
"Although this process remains uncertain and fluid, we will need to restructure our balance sheet in order to improve our capital structure, adjust our business to ongoing depressed Powder River Basin thermal coal industry conditions, address our significantly reduced liquidity and continue as a going concern," the filing read.
The company expects its mining operation and reclamation activities to continue as normal.
