The Firm recently represented Peabody Energy Corporation (Peabody) in connection with the financing of the acquisition by PEAMCoal Pty Ltd (PEAMCoal), a joint venture which is indirectly owned 60% by Peabody and 40% by ArcelorMittal, S.A., of shares of Macarthur Coal Limited (Macarthur) tendered in connection with PEAMCoal’s takeover offer. Macarthur is a leading producer of coal product used for steel making with production and development assets located in Australia.
The financing arrangements consisted of $1.0 billion of senior unsecured term loans, $3.1 billion of senior unsecured notes (consisting of $1.6 billion aggregate principal amount of 6.00% Senior Notes due 2018 and $1.5 billion aggregate principal amount of 6.25% Senior Notes due 2021) and $2.0 billion of senior unsecured bridge commitments, which were replaced by the term loans and notes. A portion of the proceeds of the notes is expected to be used to finance the upcoming acquisition by Peabody of ArcelorMittal S.A.’s interest in PEAMCoal, which will result in Peabody owning 100% of PEAMCoal and becoming the owner of all the Macarthur shares tendered in the takeover offer.
Peabody is the world’s largest private sector coal company and a global leader in clean coal solutions. With 2010 sales of 246 million tons and nearly $7 billion in revenues, Peabody fuels 10% of U.S. power and 2% of worldwide electricity.
The Simpson Thacher team for these transactions included Marissa Wesely, Matthew Einbinder, Andrea Sung, Chelsea Freeman and Andrew Wolstan (Banking and Credit); Risë Norman, Xavier Kowalski and Matthew Farrell (Capital Markets); Adeeb Fadil and Noreen Lavan (Environmental); Jeanne Annaruma (Executive Compensation and Employee Benefits); Ellen Smiley (PCAP); and Jonathan Cantor, Sean Austin, Christian Miller and Beatrice Larkin (Tax).