WILMINGTON, Del., Dec 29 (Reuters) - Peabody Energy Corp said on Thursday the deadline for creditors to join financing deals aimed at bringing the largest U.S. coal miner out of bankruptcy had been extended after large investors sued to slow the process.
Last week, Peabody unveiled its plan to eliminate more than $5 billion of debt and raise capital from creditors with a $750 million private placement and a $750 million rights offering.
The financing agreements were funded by key creditors that signed on to a plan support agreement with Peabody, although a portion of those deals were reserved for other noteholders if they agreed to back Peabody's plan by Wednesday.
Peabody said in a statement the deadline was extended to Friday for Peabody noteholders to join the financing deals, which offer an opportunity to receive financial incentives.
The creditors will also be able to invest in coal as the industry recovers from weak prices that pushed three of the four largest U.S. coal producers into bankruptcy. Peabody this month took advantage of rising coal prices to seek court approval to repay a $500 million term loan ahead of schedule.
Peabody also said on Thursday it has growing support for its plan, with holders of 65 percent of its second-lien notes and 65 percent of its unsecured notes signing on to the financing deals and plan support agreement.
Peabody still faces opposition to its plans.
On Wednesday, investors holding about $444 million of Peabody loans and notes sued the company to halt the financing deals process, which they said denied them time to review complex agreements that were filed a week ago.
The investors want the deadline to join the deals extended until Jan. 26, when Peabody will seek approval from the Bankruptcy Court in St. Louis for its agreements and disclosures, according to court filings.
A spokesman for Peabody did not immediately respond to a request for comment.
The lawsuit was brought by affiliates of Appaloosa Management, Latigo Partners, Capital Ventures International and Venor Capital Management.
A lawyer for the investors did not immediately respond to a request for comment about the extended deadline. (Reporting by Tom Hals in Wilmington, Delaware; Editing by Meredith Mazzilli)