15th Jul 2014 11:49
LONDON (Alliance News) - New World Resources PLC Tuesday said that by July 11 it had received executed lock-up agreements from 84% of its senior secured notes and 65% of the notes by value in support of its plans for balance sheet restructuring to avoid bankruptcy.
New World Resources shares were up 18% to 14.17 pence on Tuesday afternoon.
The Europe-focused coal producer said its planned lock-up agreement has not yet received the required 75% majority of its senior unsecured noteholders.
The company said its July 15 coupon payment on its USD375 million senior unsecured notes is also subject to consent. The company said it has not yet received consent from these holders.
New World Resources said it wants to assess the prospect of success on these transactions over the coming days before deciding on the payment of the coupon, which provides for a 30-day grace period for payment.
Czech billionaire Zdenek Bakala, the majority owner of NWR, hopes to cut the company?s debt by 45% and vastly increase the number of shares in issuance after slumps in European coal mining revenues left the company nearing bankruptcy.
The company added on Tuesday that the relevant parties to the lock-up agreement have agreed certain limited changes to both its revised consensual transaction and its Alternative Restructuring Plan.
In June, the company said it had agreed provisional terms of a debt restructuring, which would see the outstanding debt under its existing notes fall to EUR450 million, from EUR775 million, and cash debt servicing costs decline. It wants to launch a cash tender to repurchase its existing notes in exchange for new debt instruments.
In early July, New World Resources said it had secured an underwriter for EUR25 million of new equity required as part of the deal, but that in order to obtain commitments to its plan it made slight revisions to the senior unsecured notes cash tender part of the deal.
At the time, it also implemented contingency planning in case the restructuring deal does not go ahead and put its operating subsidiaries on sale to cover this possibility.
New World Resources said that, should its plans all go ahead, the contingency operations will no longer be necessary and the sale process will end.
The company also said in early July that it has agreed to an alternative restructuring term sheet with certain holders of senior secured notes, which it will use as a back up plan in case the deal falls through.
By Tom McIvor; [email protected]; @TomMcIvor1
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
New World Resources