- Company says deal needed by Wednesday to meet key debt waiver
- Government asks creditors for more information on coal miner
New World Resources Plc’s owners failed to persuade the Czech government to bail out the coal company before a debt deadline this week as they seek to stave off a collapse that threatens the jobs of 13,000 miners.
The government asked creditors including Ashmore Investment Management Ltd. that took control of NWR in February for more information before deciding on any aid, Finance Minister Andrej Babis said after a meeting in Prague.
While NWR says a deal by Wednesday is a key condition for a temporary waiver on its credit facility, Babis says the company has until the end of the month.
“We agreed on a list of information they will provide to us relatively quickly,” he said. “We will not be blackmailed. They cannot give ultimatums to the government.”
The last Czech producer of coking and thermal coal faces default less than two years after restructuring debt and receiving cash from investors including founder Zdenek Bakala. He became one of the country’s richest men after buying communist-era mines and floating them on the Prague and London stock exchanges in 2008. The company fell victim to a rout in commodity prices.
An “uncontrolled” bankruptcy could cost the Czech state 33 billion koruna ($1.4 billion), while an orderly phasing out of operations may limit the cost to 17 billion koruna, NWR says, citing a Deloitte LLP study it commissioned.
“They are coming up with various numbers, but we can’t be sure if it’s the opinion of Deloitte or their clients,” Industry and Trade Minister Jan Mladek said after the meeting.