OKD faces uncontrolled insolvency, Czech government to meet owners this week

Ad Hoc Group (AHG), which has become the 60% owner of New World Resources (NWR), is pressuring the Czech government to swiftly reach an agreement on financial support for its subsidiary OKD. If no agreement is reached this week, OKD reportedly faces uncontrolled insolvency.

„The restructuring proposal requires the support of all parties, including the government. To prevent uncontrolled insolvency, a solution and funding sources for the company from the end of April need to be found as early as next week,“ AHG said in its Sunday statement.

The government has been reluctant to provide aid to hard-coal producer OKD, whose previous owners paid out dividends, loaded the company with debt and spun off some of its assets. At the same time, however, it fears that the collapse of a company directly employing 13,000 people, as well as others indirectly, could have an adverse impact on the economy. OKD is the sole producer of hard coal in the Czech Republic.