Cloud Peak Negotiates Shortest Extension Yet On Critical Payment

May 8, 2019

Cordero Rojo Mine Reclamation
Credit Wyoming Mining Association

A struggling Powder River Basin coal company has put off two interest payments again. It will be the fourth extension. One is for debt due in 2021 and the other for 2024. Cloud Peak Energy negotiated with debt holders to put off paying until May 10. Past extensions have lasted a month, two weeks and one week.

Clark Williams-Derry, director of energy finance with Sightline Institute, an environmental-focused think-tank, said Cloud Peak has had more delays than Arch, Peabody, and Alpha.

The owner of two Wyoming mines has disclosed its considered a bankruptcy filing and that a loan default could trigger that. Cloud Peak wrote it's still evaluating restructuring options.

"We remain actively engaged in discussions... regarding potential alternatives, including asset sales, a debt restructuring, or some combination thereof, which transaction or transactions may take place through a court-supervised process under Chapter 11 of the U.S. Bankruptcy Code, and we are also in discussions regarding our related financing needs," reads the company's 8-K filing.

A report from Wall Street Journal found the company is considering bankruptcy as soon as this week. Williams-Derry clarified nothing is set in stone and that it could file another extension, or miss the deadline and wait until Monday to file for Chapter 11 bankruptcy.