PRAGUE (Reuters) - The Czech government is willing to step in to help 13,000 workers whose jobs are under threat at loss-making coal miner New World Resources (NWR) (L:NWRR) but will not offer any deal to help shareholders, the industry minister said on Thursday.
NWR, which operates four coking and thermal coal mines in the north-eastern Czech Republic, has been hit by a slump in coal prices and has said it could run out of cash by the third quarter of 2016.
NWR management will meet the ministers of industry, finance and social affairs on Dec. 9 to discuss the future of the company.
Industry and Trade Minister Jan Mladek said NWR should not expect any deal that would benefit shareholders.
"The only thing I am ready to say is that the government is ready to do the maximum to help the people, not the company," he told Reuters.
Mladek said he could see a possibility to provide state aid if the firm went into insolvency and its assets were transferred to a state-owned mining firm. He, however, did not completely rule out some form of state involvement outside bankruptcy proceedings.
"I do not want to jump ahead, because we will be attempting to square the circle. Maybe we will achieve something."
NWR, partly owned by billionaire Zdenek Bakala, operates four deep mines in the northeast Ostrava region, supplying steel makers, coke and power plants in central Europe. The firm already went through a financial restructuring last year but the continued coal price slump has clouded its future again.
The price drop has invalidated a previous deal under which the government agreed to provide 600 million crowns (£15.7 million) to cover social costs of the closure of NWR's Paskov mine if the firm keeps it going until 2017.
An industry ministry document said NWR representatives have declared they now saw Paskov operating until 2016 and asked for state aid for other mines as well.
Finance Minister Andrej Babis said last month NWR should seek a debt-for-equity swap and look for strategic investors before asking for any government involvement.
NWR did not confirm any specifics of its discussion with the government beyond Paskov.
"Negotiations over a new Paskov agreement with the Czech government have started, beyond this we maintain an open dialogue with the government on all relevant matters," spokesman Joe Cook said.
NWR stock has slumped to record low of 0.1 crowns, putting its market value at 767 million crowns on Thursday. Bond holders, including Ashmore Investment Management and Cazenove, would be key players in any future restructuring.