New World Resources: OKD board to discuss insolvency filing Tuesday

By Caroline Salls

Pittsburgh, April 29 – New World Resources plc and New World Resources NV said the board of subsidiary OKD met Friday to assess the status of the discussions between the Czech government and an informal group of creditors, its current liquidity position and its imminent liabilities, and the board will meet on May 3 to discuss the potential filing of an insolvency petition by OKD.

According to a news release, the Czech government has so far given no formal response to the AHG proposals.

Given the current status of the discussions, it is unclear if an agreement between the Czech government and the AHG can be reached before OKD has exhausted all available sources of financing.

The New World group said it understands that the Czech government will be meeting on May 2 to discuss the matter.

As previously reported, the New World group has been in discussions with its stakeholders, including the Czech government and the AHG, since the beginning of December regarding a restructuring of liabilities and the provision of vital additional liquidity to OKD.

The company said a diligence meeting took place recently between the Minister of Finance and OKD management to provide a clear picture on current predictions that in the coming weeks OKD will require an external injection of money to remain in a positive cash balance and to be able to meet its financial liabilities, including paying workers.

Against this backdrop, the Czech government and the AHG were informed on April 25 that unless an agreement is reached on a restructuring term sheet and/or a transaction involving the sale of OKD to the Czech government by the close of business on April 29 and OKD obtains assurance regarding the provision of additional future liquidity to OKD, the directors of OKD will have to consider the timing of filing for the insolvency of OKD and the discontinuation of OKD's mining operations.

New World Resources is an Amsterdam-based central European coal producer with operations in the Czech Republic.

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