TORONTO (miningweekly.com) – US coal producer Peabody Energy has changed certain elements of its 2013 agreement with the United Mine Workers of America (UMWA) to resolve outstanding issues regarding Patriot Coal retiree healthcare benefits.
The NYSE-listed company noted that the changes would result in boosting 2017 cash flows by $70-million.
Since 2013, Peabody had contributed $165-million in healthcare funds to the Voluntary Employees' Beneficiary Association (Veba) as part of a three-party agreement involving the UMWA and Patriot Coal. While Peabody had met its obligations under this agreement, bankrupt Patriot had broken the agreement, which left Peabody's ongoing funding requirements to Veba unclear, the company advised.
To this end, Peabody had agreed to pay $75-million to Veba in equal monthly instalments, starting on Monday, subject to court approval. The remaining instalments would be made at the start of each month follow, with Peabody's obligations to the Veba ending by October.
The payments would terminate early if Veba participants could start receiving alternative forms of healthcare benefits from new legislation, the company stated. Peabody's payments for retiree healthcare under the Coal Act remained unchanged.
Peabody noted that the market conditions occurring in the coal industry were unprecedented and had created hardship for stakeholders at all levels.
Edited by: Samantha Herbst
Creamer Media Deputy Editor
EMAIL THIS ARTICLE SAVE THIS ARTICLE
To subscribe email subscriptions@creamermedia.co.za or click here
To advertise email advertising@creamermedia.co.za or click here
