May 2, 2016 / 3:51 PM / 4 years ago

UPDATE 2-Coal miner NWR faces insolvency or buyout at lower price -minister

* Miner NWR seeks state deal to restructure or sell OKD

* OKD board meets to decide next steps on Tuesday

* Owners AHG say ready to negotiate (Adds NWR shareholders’ reaction)

PRAGUE, May 2 (Reuters) - New World Resources’ (NWR) loss-making coal mining division OKD will have to file for insolvency unless the government can agree a deal with its owners to take the company over at a lower price, Czech Industry Minister Jan Mladek said on Monday.

NWR has already said the coal mining group will run out of money by the middle of May and will need to file for insolvency before that unless the government and creditors agree a deal soon. The coal miner, which employs around 13,000 people, has been hit by low prices and weak demand.

NWR’s main owners and creditors, which include a group of fund managers known as AHG, have offered to sell the coal miner to the Czech state for around 120 million euros ($137.72 million), cleared of most debt.

The company has been trying to reach a restructuring and state aid agreement with the government since the end of last year.

But the government has been reluctant to provide aid that would benefit NWR’s shareholders or creditors, and has worked on plans instead to help to miners after they lose jobs.

Mladek said on Monday that NWR’s options were limited.

“I would narrow this to two options. Either the owners will lower their demands for the sale of worthless shares ... or there will be insolvency,” he told reporters.

“It would have to be significantly less (for the sale), and we would have to reach consensus with the finance minister, which I do not consider to be entirely easy after today’s debate in the cabinet.”

Mladek said he did not know of any planned meetings between the government and the company this week.

AHG, the group of global funds controlling 60 percent of NWR voting rights and two thirds of debt, said in response to Mladek’s comments that it was ready to talk.

“If we are to interpret this as an invitation to meet, the ministers need to just state when and where, they know we’ll be there ready to negotiate,” an AHG spokesman said.

OKD’s board is due to discuss the option of insolvency on Tuesday, NWR said last week.

NWR Chairman Gareth Penny said on April 28 that the government had still not formally responded to any proposals from the company’s owners. He said they had offered to write off some 450 million euros in debt, leaving OKD with around 115 million euros to repay.

AHG consists of Ashmore Investment Management Limited, Gramercy Funds Management LLC and M&G Investment Management Limited. ($1 = 0.8713 euros) (Reporting by Robert Muller; Writing by Jason Hovet; Editing by Susan Thomas and Jane Merriman)

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