New World Resources Seeks Creditor Protection in New YorkTiffany Kary
New World Resources NV, a coal mining and coke-production company, requested creditor protection in the U.S. while it restructures its debts elsewhere.
The company filed under Chapter 15 of the U.S. Bankruptcy Code today in Manhattan on behalf of a London-based unit.
Under Chapter 15, a company can block lawsuits and organize creditors in the U.S. while conducting its principal reorganization in another country.
On July 29, a U.K. court ordered creditors of New World Resources Plc to vote on an 825 million-euro ($1.1 billion) debt restructuring plan that will help the Czech parent avoid bankruptcy. Bondholders would vote at the end of August under a U.K. legal procedure known as a scheme of arrangement.
Czech billionaire Zdenek Bakala, the main shareholder of NWR, is seeking approval to cut debt by 45 percent. After six quarters of losses fueled by plunging coal prices and government pressure to keep a money-losing mine open, the only other option would entail selling most assets, the company said on July 2.
Its 275 million euros of senior unsecured bonds maturing January 2021 traded at 16 cents on the euro, and its 500 million euros of secured debt due May 2018 traded at 72.63 cents, according to data compiled by Bloomberg.
The U.S. petition listed assets and debt of more than $1 billion each. White & Case is representing the company, and U.S. Bankruptcy Judge Stuart Bernstein will oversee the case, according to the filing.
The case is New World Resources NV, 14-bk-12226, U.S. District Court, Southern District of New York (Manhattan)