February 29, 2016 / 10:52 AM / 4 years ago

UPDATE 1-NWR bondholder group says ready to invest more if state provides support

* Bondholder group ready to invest more if state helps

* Group set to become NWR’s main owner

* Unions on strike alert, urge govt to help (Adds quote, unions’ letter, details)

PRAGUE, Feb 29 (Reuters) - A group of bondholders in New World Resources (NWR) which is set to become the coal miner’s main owner is willing to put more money into the company if the state is also willing to provide support.

Loss-making NWR, owner of the Czech Republic’s only hard coal mines, has been in discussions with stakeholders and the Czech government to avoid collapse due to depressed coal prices.

NWR said last week 50.5 percent shareholder CERCL would transfer shares to the company for free to be cancelled, leaving a trio of bondholders who already held a substantial stake under a previous restructuring with 60 percent.

The bondholders group, made up of Ashmore Investment Management, Gramercy Funds Management and M&G Investment Management and dubbed AHG, said on Monday it wanted all stakeholders, including the government, unions and investors, to develop a plan for NWR’s Czech unit OKD.

“It is likely that further money will have to be invested to support the group through restructuring and recovery,” AHG said in a statement.

“If all stakeholders support the restructuring and recovery plan and the government is willing to extend appropriate support then AHG are prepared to invest further money on appropriate terms.”

The government has so far refused to provide cash but has said it was ready to help miners who lose jobs.

Industry And Trade Minister Jan Mladek told Reuters last week the government’s stance held for the time being but the cabinet would discuss the situation again when the departure of CERCL, with whom the government has icy relations, takes effect.

NWR went through a major debt and equity restructuring in 2014 but has struggled to generate cash as coking coal prices remain half of what they were five years ago.

AHG said it and other bondholders had shown continuous support for NWR, including writing off 235 million euros and injecting around 110 million euros of equity and debt into the company in the 2014 refinancing.

Faced with growing uncertainty, OKD unions voted on Friday to go on strike alert. In an open letter on Monday they asked the government to all stakeholders and provide a plan to tackle the unfavourable conditions at OKD, especially in case of massive layoffs among the nearly 13,000-strong workforce. (Reporting by Jan Lopatka, Jason Hovet and Robert Muller; Editing by David Holmes)

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