NRW supports Gascoyne DOCA

Contractor NRW Holdings has decided to back a proposed deed of company arrangement by the administrators to Gascoyne Resources after negotiating an increased upfront debt repayment of $7 million in cash.

The announcement comes one day after administrators FTI Consulting recommended creditors support the planned DOCA ahead of the late proposal received from China-based Hanking Gold Mining on Monday.

Under the original DOCA, NRW was due to be paid $4 million in cash up-front, with its additional debts repaid over time from Gascoyne’s mining operations.

The Hanking proposal offered a higher upfront cash return to NRW of $10 million.

FTI said in a note to creditors their recommendation was unchanged “given the uncertainty and probably delays associated with the Hanking proposal”.

The administrators reiterated key risks associated with the Hanking proposal, ahead of a creditors meeting held today, including the requirement for approval from the Foreign Investment Review Board, which would cause a delay to the overall recapitalisation timeline.

Hanking has not yet lodged an application for FIRB approval, FTI said.

Gascoyne today, however, announced it had increased its payment to $7 million, representing 8.75 per cent of the total proceeds raised from the planned equity raising, which NRW has now accepted.

The meeting of creditors was still underway at the time of publication.