New World Resources Plc rose the most in more than three years after a report stoked bets the unprofitable Czech supplier of steelmaking coal will sell assets as it revamps its business.
The stock surged 13 percent, the most since April 2010, to 21.65 koruna by the close in Prague. Jastrzebska Spolka Weglowa SA is among “many” European companies that have been invited to analyze assets put up for sale by NWR, PAP newswire reported yesterday, citing the Polish mining company’s chief executive officer, Jaroslaw Zagorowski.
“Investors are betting that asset sales will help the company reduce indebtedness or build a cash cushion in case negative trends in the steel industry continue,” Josef Nemy, analyst at Komercni Banka AS in Prague, wrote in an e-mail today. “No one has officially expressed interest in the assets so far, but NWR shares are now extremely sensitive to any news or speculation.”
NWR said in May it was seeking a buyer for its OKK coking unit and that it may sell or close some mines after it posted a first-quarter loss. The company’s shares tumbled 74 percent in the three months ended June 30, the biggest quarterly slump on record, as a recession in the Czech Republic and the euro area damped demand from steelmakers.
NWR is “seeking the divestment of the OKK coking company and is also stress-testing its coal-mining assets with a view to the possible idling, divestment or closure of some mining operations,” company spokesman Joe Cook said in an e-mail to Bloomberg News late yesterday, when asked to comment on the PAP report.
The deteriorating outlook for the coal and steel sectors prompted analysts including Goldman Sachs Group Inc., Bank of America Merrill Lynch and Deutsche Bank AG to recommended investors sell the stock. Basic resources companies are the biggest decliners this year among 19 industry groups in the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
NWR shares, which have rallied 22 percent since reaching a record low on June 27, are down 78 percent this year, compared with a drop of 15 percent for the benchmark PX Index. NWR led gains in the gauge today, with over 660,000 shares traded, more than 1.4 times the three-month daily average.