Peabody Energy Corp (OTCMKTS:BTUUQ) In Turnaround Mode

Peabody Energy Corp (OTCMKTS:BTUUQ) is racing up the charts along with other Q names like Breitburn Energy Corp (OTCMKTS:BBEPQ), Ultra Petroleum Corp (OTCMKTS:UPLMQ), and SunEdison Inc (OTCMKTS:SUNEQ). These Q stocks have been big winners for us at Insider Financial this year. We first alerted our subscribers to Peabody Energy Corp back in April when the company hit the OTC. After basing around the $1.50 support level, BTUUQ is flying higher again, delivering another win for our subscribers. The question going forward is what will common shareholders end up with after Peabody Energy emerges from bankruptcy?First up, a little background on the company. Peabody Energy is the world’s largest private-sector coal company and serves metallurgical and thermal coal customers in 25 countries on six continents. As of December 31, 2015, the company had 6.3 billion tons of proven and probable coal reserves and owned interests in 26 active coal mining operations located in the United States and Australia. The company operates through Powder River Basin Mining, Midwestern U.S. Mining, Western U.S. Mining, Australian Metallurgical Mining, Australian Thermal Mining, Trading and Brokerage, and Corporate and Other segments.On April 13, 2016, Peabody Energy Corporation along with its affiliates filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Eastern District of Missouri. The company is seeking to reorganize U.S. operations in federal court in its hometown of St. Louis, reducing an estimated $10.1 billion in debt, according to court filings. Peabody, which had revenue of $5.6 billion in 2015 and about 7,100 employees globally, filed for bankruptcy in the U.S. allowing Peabody to leave its Australian assets out of the filing. Peabody spent $4 billion in 2011 to acquire Australia’s MacArthur Coal Ltd. MacArthur is one of the leading producers of metallurgical coal, which is used to produce steel. The problem for Peabody is that the company used debt to buy MacArthur and the price of metallurgical coal has tumbled since its 2011 peak.The latest news from the company is that it obtained approval from required debtor-in-possession (DIP) lenders to amend several milestones related to the time for a decision on what is known as the CNTA issue; the company's deadline for filing of a plan of reorganization/disclosure statement; and the date targeted for court approval of the disclosure statement. The company also received DIP lender consent to an amendment to the intercompany loan facility related to the Australian platform that allows for the potential sale of some Australian assets. Peabody has stated that its Australian metallurgical and thermal coal platforms remain core to the company, though Peabody is exploring potential sale of selected Australia assets as part of its ongoing plan to optimize its portfolio.If granted, the extensions will take the CNTA-decision deadline and the deadline to file an acceptable plan of reorganization/disclosure statement to Nov. 23 and Dec. 14, respectively, from the original DIP financing deadlines of Oct. 11 and Nov. 9. The company would also modify the related deadline for receiving court approval for the disclosure statement to Jan. 31, 2017 from its original date of Jan. 8, 2017.It's in the best interests of all stakeholders for Peabody to extend this deadline and push the clock back. The reason? Peabody's core business is greatly improving. Peabody Energy and Japan's Nippon Steel have set the Q4 contract benchmark for metallurgical coal at $200/metric ton, more than twice the Q3 price, Reuters reports. The big jump underscores a resurgence in Asia's appetite for coal that also has been reflected in a recent mark-up in spot cargoes.Currently trading with a market cap of $69 million, it's still too early to tell how common shareholders will end up once the Bankruptcy process is resolved. The good news is that Peabody Energy is in turnaround mode and things are improving. This certainly helps all stakeholders in the Bankruptcy process. In the short term, we're urging our subscribers to book profits and to wait until our next BTUUQ update. We will be updating our subscribers as the BTUUQ restructuring plays out. For the latest updates, sign up below!Disclosure: We have no position in BTUUQ and have not been compensated for this article.