NWR preparing possible sale of its units including miner OKD


02.07.2014 11:58

Prague - New World Resources (NWR) is preparing a possible sale of its units including Czech black-coal miner OKD, NWR external relations director Petr Jonak told CTK today.


Ředitelství těžební společnosti OKD v Karviné. ČTK Ožana Jaroslav

A sale will materialise if NWR and its creditors fail to come to agreement on terms of a proposed capital restructuring by September, Jonak said.

Seventy-five percent of creditors have to agree with the terms, and NWR currently has a consent from 63 percent of them, according to Jonak.

NWR's board of directors believes a consensus will be reached, he said.

The board has to be prepared for all possible scenarios but none of them will have an impact on operations of OKD and the Polish mine Karbonia.

NWR is traded on the Prague Stock Exchange, and the price fell steeply on the market following the announcement of the possible sale of its operations. NWR put off nearly 9 percent to trade for Kc8.20 per unit after 9:30.

NWR incurred big losses due to a drop in coal prices on global markets. That is why it proposed a debt restructuring and new stock issue to bond owners. Early in June the firm said that following agreement with creditors its debt might decrease by EUR325m to EUR450m (Kc12.4bn) and that it plans to raise capital by EUR185m.

OKD, faced with economic problems, said last September that it will close the Dul Paskov mine. The firm said that if only OKD bears the phase-out costs the mine will be closed as of December 31, 2014. Dul Paskov has roughly 2,500 employees.

The government and NWR signed an agreement on state aid at the beginning of June under which mining at Dul Paskov will continue until the end of 2017. The government will allocate Kc600m for social programmes for dismissed miners.

The group BXR owns two-thirds of NWR. Entrepreneur Zdenek Bakala has around a 50 percent stake at BXR.

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