Leading Australian resources and infrastructure contractor NRW Holdings (ASX: NWH) has noted the announcement by FTI Consulting as voluntary administrators to Gascoyne Resources Limited (ASX: GCY) and its related entities in relation to a proposed recapitalisation plan to be voted on at a meeting of Gascoyne creditors on 25th June 2020.
The recapitalisation plan will involve:
An equity raising from new and existing shareholders in the order of $70-$80 million; and
Reaching separate arrangements with key stakeholders being the Senior Secured Lenders, NRW, and unsecured creditors for the repayment of pre appointment debts.
Gascoyne owed $32.7 million (“amount owed”) to NRW at the time of the appointment of Voluntary Administrators. The amount owed representing a loan provided to Gascoyne and trading debts for work performed was fully impaired by NRW in the 2019 financial accounts.
The proposed recapitalisation plan offers the potential for a 100% return of the amount owed to NRW via a combination of:
An upfront cash payment equal to 5% of the gross proceeds of the equity raising;
Issue of equity equal to $12 million at the issue price under the equity raising; and
A contingent payment amount for the balance linked to ounces produced and the gold price.
NRW has worked closely with FTI Consulting and Gascoyne Resources on the Dalgaranga project to support operational priorities over the past 12 months. NRW remains focused on performing the Mining Contract and on supporting the recapitalisation plan towards a successful outcome.
NRW notes the timetable for the recapitalisation plan and does not expect any resulting cash flows to impact the current financial year’s results.