PRAGUE, April 7 Czech trade minister Jan Mladek
said on Monday loss-making coal miner New World Resources
needed 3 billion crowns ($149.72 million) or
more in new capital or it would face bankruptcy.
The Czech hard coal miner, which made a record
fourth-quarter loss due to a sharp fall in coal prices, has been
working on a capital restructuring since January.
Its main shareholder BXR, which owns 63.6 percent, has said
it is willing to invest new equity if there is a "revised and
satisfactory" capital structure. Analysts have said a possible
change in its capital structure could result in a loss for
NWR's problems have turned the spotlight on Czech investor
Zdenek Bakala, a major shareholder in BXR.
"So if Mr. Bakala does not put 3 billion crowns there, it
will go into bankruptcy," Mladek said on Czech Television on
Monday. Elsewhere in the interview the minister estimated the
amount needed at 3-5 billion crowns and said this was required
from the owners (BXR) by the autumn of this year.
He said it was a matter for private creditors and not the
government to take any steps, but the government was responsible
for the situation of NWR's workers.
NWR reiterated on Monday BXR was prepared to commit new
equity if a satisfactory capital restructuring is achieved.
"NWR cannot comment (on Mladek's remarks) because of ongoing
negotiations with the Czech government and ongoing negotiations
with creditors under the capital review process," NWR spokesman
Joe Cook said.
"We can reiterate that BXR, the majority shareholder, has
stated its commitment to investing new capital providing there
is a satisfactory outcome to the capital review."
A spokesman for Bakala had no immediate comment.
AID FOR PASKOV MINE
NWR's problems have triggered a row within the country's
centre-left government over whether to provide state aid to keep
open one of the mines that was due to close this year. Keeping
the Paskov mine open would protect jobs in a region which
already has high unemployment.
Finance Minister Andrej Babis, who had previously opposed
aid, said on Monday he had agreed a compromise proposal with NWR
that would allow the Paskov mine to stay open until 2017. Under
this plan, the state would pay about 600 million crowns to
finance a social programme for the miners that will ultimately
lose their jobs.
Previous state aid plans had called for 1.1 billion in aid
and for the mine to close in 2016.
The Czech Republic's industrial northeast, where Paskov is
located, is already struggling with some of the highest
unemployment rates in the central European country. The
government fears closure would affect around 2,500 workers at
the mine and thousands more in a knock-on effect.
NWR shares hit an all-time low of 9.50 crowns in February.
They were at 13.00 at 1303 GMT on Monday, up 2.9 percent on the
day. The firm's unsecured bonds due in 2021 were bid at 14.75
percent of face value.
NWR had net debt of 625 million euros at the end of 2013.
($1 = 20.0369 Czech Crowns)
($1 = 0.7303 Euros)
(Reporting by Jan Lopatka. Editing by Jane Merriman)