There’s a report on Debtwire today that a group of Atlas Iron’s lenders want to force the miner to enter voluntary administration and gain a debt-to-equity restructure.
It appears be a bullish move and could mean the noteholders see more value in the equity than the debt.
According to the Debtwire report by Ivan Ah Sam and Luc Mongeon, the lenders make up more than half of the miner’s $US275 million Term B loans.
A letter from the lenders’ legal representation Gilbert+Tobin has been sent to the company stating they’re concerned the troubled iron ore miner is insolvent.
Although Atlas says it is positive there is no default on any secured debt and the company is in active talks with stakeholders, including the secured creditors.
“Discussions with our unsecured creditors are continuing and positive,” the company said in a statement to the ASX.
Late last week Atlas revealed it had been smashed by the plunging iron ore price and would move to suspend its mining and export operations, progressively over the next couple of months.
The miner, which is undergoing an extensive internal review, has clocked about $330 million in gross debt and at the end of December had about $170 million cash on hand.
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