22nd Jan 2014 18:15
LONDON (Alliance News) - New World Resources PLC Wednesday said it has initiated a review into its capital structure, citing the continued pressure on both coking and thermal coal pricing and the fact that it hasn't yet secured an extension of its EUR100 million revolving credit facility.
In a statement, the Central Europe-focused hard coal and coke producer said price pressures had played their part in the decision to initiate a review of its capital structure. Also taken into account is its EUR100 million revolving credit facility's upcoming expiry on February 7. The company is yet to secure an extension of the credit line, which is fully undrawn.
New World Resources is currently reviewing its mineral reserves. It said it expects a, "significant decrease" of its economically mineable coal reserves.
"The review will be focused on the group's balance sheet and will consider all available options. It is expected not to impact the group's customers, employees, partners, suppliers or trade creditors," New World Resources said in a statement.
It said its majority shareholder, BXR, has confirmed its continued support for its business strategy. According to New World Resources, BXR has indicated that it and its shareholders are prepared to invest new equity capital into a "revised and satisfactory" capital structure.
New World Resources said it has agreed to a lower average agreed price for coking coal deliveries for the first quarter of 2014.
New World Resources said the average agreed price is EUR91 per tonne, a 7% decrease compared to the fourth-quarter of 2013 realised price.
The company also said it has agreed a lower average price for 80% of its expected thermal coal production in 2014. The price agreed has been set at EUR54 per tonne, a 4% decrease on the full-year 2013 price.
The remaining 20% of expected thermal coal production will be sold and priced later in the year.
New World Resources said it is targeting full-year 2014 coal production and sales of 9-9.5 Mt, with 55-60% of coking coal and 40-45% of thermal coal in the sales mix.
However, it also said production of both coking coal and thermal coal increased in the fourth-quarter, up to about 2.3kt from about 2.2kt in the third-quarter. Coking coal sales increased to 1.2kt from 1.1kt, while thermal coal sales increased to about 1.32kt from about 1.25kt, over the same time period.
The average realised price of coking coal in the fourth-quarter rose to EUR98 per tonne, compared to EUR91 in the third-quarter. The average realised price of thermal coal fell marginally, to EUR55 per tonne from EUR56 in the third-quarter.
"Considerable progress has been made in implementing the company's plans to restructure the operations of OKD, [the company's] mining subsidiary," New World Resources said.
NWR will publish its results for the full-year 2013 on Thursday 13 February 2014, when further information will be provided.
The company's shares Wednesday closed at 75.50 pence, down 2.25 pence, or 2.9%.
By Samuel Agini; [email protected]; @samuelagini
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