2nd Jun 2014 08:00
LONDON (Alliance News) - New World Resources PLC Monday said it has agreed the key terms of a debt restructuring with the holders of its secured and unsecured senior notes and its majority shareholder, BXR Mining BV.
The Europe-focused hard coal producer said that as part of the restructuring, the outstanding debt under its existing notes would fall to EUR450 million from EUR775 million, with a fall in cash debt servicing costs, due to a cash tender to repurchase its existing notes and exchange for new debt instruments.
The company also said it will obtain up to EUR185 million of additional capital from shareholders and noteholders, of which EUR160 million is already conditionally committed, with EUR75 million in equity from BXR, EUR50 million in equity from certain existing noteholders, and a EUR35 million super senior credit facility from some of its existing noteholders.
New World Resources said it is also planning a combination of a share placing and rights issue to enable its existing shareholders to further support the company. It said the rights issue is expected to involve a share offer designed to raise at least EUR100 million.
The company added that the restructuring includes an extension of its debt maturities to 2020 and the option to service debt in either cash or a non-cash 'pay-in-kind' basis.
New World Resources said the plans have the unanimous support of its committee of creditors and BXR, representing more than 56% of the senior secured notes, 25% of the existing unsecured senior notes and 64% of its existing shareholders.
It said it hopes to complete the transaction around the end of September.
"I, together with the board, recommend that all stakeholders support this consensual transaction, not least because we feel that in alternative scenarios recoveries to all stakeholders could be severely diminished," Chairman Gareth Penny said in a statement. "After a successful completion of this process, we can look forward to the future with confidence and the management team can again fully focus on our operations."
New World Resources swung to a pretax loss of EUR1.06 billion for 2013, as lower coal prices hit its revenues. However in May the company announced that its pretax loss narrowed in the first quarter ended March 31 as costs dropped significantly compared to the previous year.
The company also announced in May that a 46-year old worker had died in a mine owned by its Czech mining subsidiary OKD, which was the fifth death at its operations during 2013 and so far in 2014.
New World Resources shares were up 9.7% to 27.97 pence during early trading on Monday.
By Tom McIvor; [email protected]; @TomMcIvor1
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