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NEW WORLD RESOURCES

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New World Resources : Expiry of SSCF Waiver Agreement

04/25/2016 | 02:51am EDT

Amsterdam / London, 25 April 2016

Expiry of Super Senior Credit Facility Standstill and Waiver Agreement

New World Resources Plc ('NWR Plc') and New World Resources N.V. ('NWR NV', and NWR Plc and NWR NV, together with their subsidiaries, the 'Group') today announce that - although the Group is in continuing discussions with certain key stakeholders, including the Czech Government, regarding a restructuring of the Group's financial indebtedness - a non-binding agreement with the Czech Government has not been secured. On this basis the ad-hoc group of senior creditors of the Group and shareholders in NWR Plc (the 'AHG') have not agreed to waive or extend the Super Senior Credit Facility Standstill and Waiver Agreement (the 'SSCF Waiver').

This expiry means that certain members of the Group are now in default under their financial obligations - obligations that are guaranteed by OKD.

Given the current status of discussions, it is unclear whether agreement on a restructuring plan can be reached before OKD has exhausted all available sources of financing and thus, whether OKD may be obliged to commence insolvency proceedings.

SSCF Waiver

As previously announced, the requisite majority of lenders under the SSCF agreed on 23 February 2016 to a standstill and temporary waiver. The terms of this standstill and temporary waiver were that it will remain in place until 31 July 2016, if certain milestones regarding the progress of negotiations and reaching of agreement on a restructuring of the Group are satisfied, namely: (a) a non-binding heads of agreement for the implementation of a restructuring of the Group with the Czech Government on or by 22 April 2016 (originally 31 March 2016, but recently extended with agreement of the requisite majority of lenders on 14 April 2016) (the 'First Milestone'); and (b) a binding agreement regarding a restructuring with the Czech Government on or by 30 April 2016.

A non-binding agreement with the Czech Government has not been secured and on this basis the AHG have not agreed to waive or extend the First Milestone.

Consequently, the SSCF Waiver has terminated and events of default under certain terms of the SSCF have occurred and are continuing. This in turn triggers a cross-default to the Group's export credit agency-backed facility (the 'ECA Facility'). Should either the SSCF lenders or the ECA Facility lenders accelerate their debts, potential acceleration under the terms of other financial indebtedness of the Group (including the Senior Secured Notes) could occur.

The Group has been in discussions with its stakeholders, including the Czech Government and the AHG, since the beginning of December 2015, regarding a restructuring of liabilities and the provision of vital additional liquidity to OKD. These discussions continue.

However, given the current status of these discussions it is unclear whether agreement on a restructuring plan can be reached before OKD has exhausted all available sources of financing and thus, whether OKD may be obliged to commence insolvency proceedings.

Status of Discussions

The Czech Government has been provided with all relevant information about the Group and OKD. Towards the end of December 2015, the Ministry of Industry and Trade made a request in writing for an extensive list of information. This information was provided by the requested deadline in early January 2016. Further information requests by the Czech Government have been addressed immediately upon receipt (including the request that was made recently during the meeting of the Group and the AHG with the Government on 12 April 2016). To date no formal response has been received from Government.

The information gives a clear picture: on current predictions, 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 the workers.

As a result, the AHG has decided not to extend the SSCF waiver that they had the Group given on 23 February 2016. This means that certain members of the Group are in default under its financial obligations - obligations that are guaranteed by OKD.


Accordingly having had regard to OKD's current liquidity position and its imminent liabilities, the boards of all NWR Group companies - including OKD - have sent a letter to the Czech Government and the AHG today to inform these parties that unless, by close of business on Friday 29 April 2016,

(a) agreement on a restructuring term sheet and/or a transaction involving the sale of OKD to the Czech Government is reached; and

(b) OKD obtains clear and sufficient 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.

- End -

Investor and Media Contact:

Radek Nemecek

Tel: +420 727 982 885

rnemecek@nwrgroup.eu

Website: www.newworldresources.eu

About NWR:

New World Resources Plc is a Central European hard coal producer. NWR produces quality coking and thermal coal for the steel and energy sectors in Central Europe through its subsidiary OKD, the largest hard coal mining company in the Czech Republic.

NWR - New World Resources plc issued this content on 25 April 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 25 April 2016 06:50:16 UTC

Original Document: http://www.newworldresources.eu/en/media/press-releases/2016/Expiry of SSCF Waiver Agreement


ę Publicnow 2016
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