29th Apr 2016 16:42
LONDON (Alliance News) - Troubled New World Resources PLC late Friday said its main subsidiary which holds its coal assets is considering filing an insolvency petition as it continues to try to strike a deal with its creditors and the government of Czech Republic over its imminent liabilities.
New World is on the brink of insolvency and is struggling to find a solution to its financial woes as it tries to clear a mountain of debt, a task that is even more difficult due to the company's expectation to make annual losses every year until at least 2018.
At the end of 2015, New World had total net debt of just under EUR300.0 million.
The board of the subsidiary that holds all of New World's assets, OKD AS, has been trying to find a solution to its current liquidity issues and its imminent liabilities by holding discussions with the government of the Czech Republic, where it operates, and with the ad-hoc group of senior creditors.
The government has, "so far", given no formal response to the proposals that were made by the ad-hoc committee, New World said Friday.
"Given the current status of the discussions, it is unclear if an agreement between the Czech government and the [ad-hoc committee] can be reached before OKD has exhausted all available sources of financing," said the company.
New World said the board of OKD met Friday to discuss the urgent matters, but said "in light of current circumstances" a decision was made to reconvene on Saturday - when the board will discuss the potential filing of an insolvency petition by OKD.
New World shares closed down 25% to 0.200 pence per share on Friday.
By Joshua Warner; [email protected]; @JoshAlliance
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