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bomb is ticking and the time horizon to find a solution becomes shorter and shorter. Over the last four quarters, the operating <br />cash flow figure is positive by only $32 million and the investing cash flow metric is negative by $371 million. So, the <br />corporation is burning $339 million per year based on the current market conditions. <br />Currently, it has $334 million in cash and cash equivalent. If we add $57 million for the Prairie State Energy Campus sale and <br />$358 million for the New Mexico and Colorado sale, it is possible to conclude that Peabody has $750 million in its bank <br />account. Nevertheless, Arch Coal went bankrupt even with almost $700 million in cash. The situation was similar for Alpha <br />Natural Resources. <br />There are two possible scenarios the avoid this terrible outcome. The first scenario is to finalize the debt exchange <br />agreement. This scenario did not work for the other coal producers. The second scenario is to continue to sell a meaningful <br />amount of assets at a distressed price. Based on the atmosphere in the coal industry, the totality of its assets is probably not <br />worth the principal of $6.3 billion in my opinion. <br />In conclusion, the bankruptcy looks inevitable in my opinion. I believe the asset sales are only buying time and not solving the <br />real problem. I would not touch the stock with a ten -feet pole. In few years, the coal sector will become interesting for a <br />bargain hunter like me. In a previous article, I briefly explained why I am bullish on Alliance Resources Partner <br />(NASDAQ:ARLP). I would not buy any coal stock at the moment. Because of the substantial short interest, I would not short <br />Peabody Energy due to the short squeeze risk. <br />l am an undergraduate student, not a professional. Please take this factor into consideration. Please do your due diligence <br />and consult your financial advisor before taking any action. l am not a financial advisor. This article expresses my opinion <br />only. <br />The opinions in this document are for informational and educational purposes only and should not be construed as a <br />recommendation to buy or sell the stocks mentioned. The information in this document is believed to be accurate, but under <br />no circumstances should a person act upon the information contained within. We do not recommend that anyone acts upon <br />any investment information without first consulting an investment advisor as to the suitability of such investments for his <br />specific situation. <br />9,791 people get BTU breaking news and analysis by email alert <br />Get email alerts on BTU)) <br />Comments (48) <br />silence82 <br />David <br />To conclude that the previous debt exchanges failed and therefore Peabody will fail in theirs seem like a <br />sweeping statement. Did you know that the intercreditor provisions of the 1/2 lien debt allows the <br />company to issue additional notes? This is different from Arch where they didnt have that option to <br />restructure. <br />There are quite a few things u also didnt touch upon. The Veba payments saved, the AUD hedges <br />coming off, the potential for more debt buybacks, the additional 400m of secured financinig they are <br />obtaining from their Aussie asset and the fact 80% of their 2016 production is already fixed. These were <br />all announced in Q4 alone and was after the fact that everyone knew Arch was going to file. If the <br />company was going down this route, i would think that they wouldnt have wasted their time with such <br />