State would consider buying OKD if it was on sale - minister


07.07.2014 11:51

Prague - The state would consider buying black-coal miner OKD, a unit of mining group New World Resources (NWR), if it was on sale in the future, Industry and Trade Minister Jan Mladek said on the public broadcaster Czech Television (CT) today.


Ředitelství těžební společnosti OKD v Karviné. ČTK Ožana Jaroslav

The state's priority is to maintain work for OKD's 14,000 employees for at least ten years, Mladek said.

However, according to NWR´s external relations head Petr Jonak, the sale of subsidiary OKD is not on the agenda at present.

According to Mladek, the state would consider buying OKD under certain conditions. The state would subordinate all talks to preserving jobs for OKD employees. "We would like a strategic investor, preferably a company engaged in the same field, focusing on coal mining instead of financial speculations, to enter OKD in the event of its sale," Mladek said.

A direct entry of the state is not quite simple, Mladek added.

Mladek also said he would inform the government about the situation in OKD. For today he has invited OKD representatives to discuss the situation with them.

NWR said last week it was preparing for a possible sale of its subsidiaries, including OKD and Poland´s NWR Karbonia. According to Jonak, the sale will materialise if NWR and its creditors fail to come to an agreement on terms of a proposed capital restructuring by September.

Seventy-five percent of creditors have to agree with the terms. Last week, NWR had a consent from 63 percent of them.

Today, Jonak declined to say today whether the ratio has changed. Since NWR is trading on three stock exchanges, it is obliged to announce the figures to all the three markets at once, he said.

"Talks with investors are in progress every day," Jonak said.

OKD, faced with economic problems, said last September that it will close the Dul Paskov mine. The company said that if OKD bears the phase-out costs alone, the mine will be closed as of December 31, 2014.

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

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 company said that following an agreement with creditors its debt might decrease by EUR325m to EUR450m (Kc12.4bn) and that it plans to raise capital by EUR185m (Kc5bn).

Almost two-thirds of NWR are owned by the BXR group, in which Czech entrepreneur Zdenek Bakala holds around 50 percent.


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