Peabody Energy didn't want its bankruptcy case to celebrate a birthday.
The St. Louis coal-mining giant said last April 13, when it made the Chapter 11 filing, that it expected to complete its reorganization in less than a year. It plans to make good on that vow Monday and its stock should resume trading Tuesday under its old ticker symbol, BTU.
That stands for British thermal unit, a measurement of a fuel's heat content. Coal isn't as dominant in the world's fuel mix as it was in 2001, when Peabody first listed its stock as BTU, but its future looks brighter than it did a year ago. Prices are up, and President Donald Trump is reviewing rules that would have hastened the shutdown of coal-burning power plants.
Peabody has made itself more attractive too. It used bankruptcy to shed $5.2 billion in debt while raising $1.5 billion of new equity. The result, Chief Executive Glenn Kellow says, is "a capital structure designed to weather what we still see as a cyclical commodity industry."
In the old Peabody, shareholders' equity was enough to cover just one-eighth of the debt. Now it covers 150 percent.
This year's financial priority, Kellow said in a phone interview, is to pay down debt. In 2018, Peabody will be allowed to pay a dividend. "In this space, shareholders are very focused on cash returns, and that's something we're cognizant of," Kellow said.
Investors seem ready to welcome the world's largest private-sector coal miner back from bankruptcy. Peabody's recent $1 billion bond offering was oversubscribed, and a report from Clarkson Pitou Securities of New York puts a "buy" rating on the new BTU shares.
In the report, analyst Jeremy Sussman praises Peabody's "combination of size, likely trading liquidity, a strong balance sheet and geographical diversity" and writes that the company should trade at a premium to other mining companies.
Peabody's timing may not be as fortuitous as that of crosstown rival Arch Coal, which emerged from bankrupty last October and saw its shares rise 35 percent within a month.
Arch benefited from a rally in coal prices last summer and fall, and then from enthusiasm over Trump's election. Its shares have retreated as coal prices have leveled off, but remain 9 percent above where they started in October.
Coal companies don't have great growth prospects, according to Morningstar utility analyst Charles Fishman, but they should at least have a future. "It's going to be a tough business, but it's not going away," he said.
Kellow maintains that Peabody has the best assets in that business. It operates seven mines in Illinois and Indiana, seven in the western U.S. and nine in Australia, although one Australian mine is for sale.
The Australian assets had been considered troubled because of falling demand from China, and Peabody's descent into bankruptcy can be blamed on a poorly timed $5.2 billion Australian acquisition in 2011.
Kellow, though, says the Australian assets are worth keeping. He says Thailand, Vietnam and South Korea are importing more utility-grade thermal coal, and India will become the largest importer of metallurgical coal, used in making steel.
"The strength of our business is our people," Kellow said, "along with the quality and diversity of our products and our locations."
Speaking of people, Peabody did an unusual thing in its reorganization plan. It set aside shares not only for top executives, but for all 7,000 employees, including 355 at the downtown headquarters.
You can bet they'll be watching the ticker closely on Tuesday.
