22nd Jul 2014 09:42
LONDON (Alliance News) - New World Resources PLC Tuesday said it has started a court process to restructure its financial obligations by means of a sanctioned settlement with all or some of its noteholders.
The Europe-focused coal producer said it has issued a letter to creditors explaining the process, and said that it intends to apply to the High Court of England and Wales at a court hearing to be held on July 29 for a court order granting the company certain directions in relation to its restructure plan.
Earlier this month, New World resources said 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.
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 near bankruptcy.
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. Should its plans all go ahead, the contingency operations will not be necessary and the sale process will end.
The company said on Tuesday that the ongoing transaction is conditional upon the agreement with lenders who have provided an export credit agency-backed loan to the company but closing of the deal is expected to take place at the end of September.
New World Resources shares were down 6.7% to 10.50 pence on Tuesday.
By Tom McIvor; [email protected]; @TomMcIvor1
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