Czech coal miner NWR on the verge of collapse as rescue talks freeze

The London-listed miner, which owns the Czech Republic-based coal company OKD, said Monday that parts of the unit were in default after talks with Prague broke down.

NWR warned that unless the government and creditors agree on the firm’s restructuring by Friday, it would have to consider filing for insolvency of OKD, shutting down all its operation, as it already is in default on part of its debt.

The firm’s main shareholders and creditors reacted to the announcement by offering to sell the OKD unit to the Czech government.

“The investors offered the government (to sell) OKD adjusted for its debt owed to bondholders, for less than 150 million euros,” a spokesman for NWR owners told Reuters in an emailed statement Sunday. “This offer means that bondholders would write off debt worth more than 400 million euros. The government has not responded to this proposal so far.”

NWR, which employs around 13,000 people and operates seven coal mines in Poland and the Czech Republic, has been severely hit by the dramatic drop of coal prices, which have roughly halved since 2011, amid a broad retreat across the commodity markets.

The company, which posted a net loss of US$263 million (€233.6m) last year, has seen its share price fall almost 100% since its 2008 listing, to 30p.