The criteria for evaluating opportunities include strategic fit, value considerations, potential growth and capital or cash requirements, he told analysts as reported in the Seeking Alpha website.
“Certainly, this is a challenging environment, and we remained focused on opportunities that include appropriate assets at acceptable valuations,” he said.
“While we may look to monetize certain assets within our larger portfolio, we are committed to maintaining a diverse platform in terms of both region and products.
“Peabody has an unmatched collection of coal assets with access to some of the best markets.
“We have more than 7 billion tons of reserves, 0.5 million acres of surface land, and ownership interest in ports and generation projects in multiple countries. And this substantial asset base provides us with option value going forward.”
Financially, Peabody is focused on optimizing liquidity during these “difficult markets with a strategic eye towards deleveraging”, Kellow said.
“As with many businesses in a cyclical market, we retain a large revolver to address potential liquidity needs while continuing to assess liquidity targets based on cash from our operations, asset sale proceeds, and other business requirements,” he said.
“At the same time, we continue to evaluate ways to reduce leverage, including debt exchanges and buybacks. Our valuation will set a number of criteria, including the economics of transactions, tax efficiency, runway, impact on interest expense and timing.
“Regarding both potential deleveraging transactions and asset sales, the behind-the-scenes activity is substantial but we also are committed to the premise that making the right deal is important as the timing.”