Unit of Eastern Europe’s largest private coal miner files for insolvency
The main unit of Eastern Europe’s largest private coal miner New World Resources (LON:NWR) filed for insolvency on Tuesday, after the Czech government and company creditors refused to offer the firm a financial lifeline.
NWR’s division, the Czech Republic-based coal company OKD, had been trying for months to work out a restructuring plan for the company, which could include a takeover, without success.
NWR’s division, the Czech Republic-based coal company OKD, had been trying for months to work out a restructuring.
Last month, OKD warned it would run out of money by the mid-May and that would have to shut down all of its operations in the European country.
NWR reiterated Tuesday OKD does not have enough money to cover its liabilities, but said the unit is awaiting some payments from customers, including steelmaker ArcelorMittal's Czech plant and U.S. Steel's Slovak plant.
OKD, which employs about 10,000 staff and 3,000 agency workers, said it would use that money to keep operations running and pay wages.
NWR's main owners and creditors, a group of fund managers known as AHG, have offered to sell the coal unit to the Czech state for $139 million (around 120 million euros), cleared of most debt.