Most of the coal mining companies, including Peabody, across the world have been facing difficult times due to declining demand for coal from power generation sector.
Peabody said that its current financial path may not be sustainable over the course of the year.
Analysts have been expecting Peabody to follow other mining companies like Arch Coal, Alpha Natural Resources and the Patriot Coal Corporation in filing for bankruptcy.
The US coal industry has been struggling due to tighter regulations and growing competition from other sources of fuel, particularly natural gas, The New York Times reported.
Peabody, the world’s largest coal company, failed to negotiate on easing its debt with creditors, which left the company with few options.
The St Louis-based company, which started its operations way back in 1883, entered the Australian coal market by acquiring two companies in the country in 2011.
The problems for coal companies have turned worse in recent years amid falling demand from emerging markets and a plunge in natural gas in the US.
Peabody’s total outstanding debt stood at $6.3bn by the end of 2015, while its cash reserves were just $261m. Coal produced by the company accounted for 9% of the US electricity in 2014.
The company owns North America’s largest mine, North Antelope Rochelle in Wyoming and it produced 99.1 million tones of steam coal from that mine in 2015.
