Atlas gets first approval

The creditors of Atlas Iron have voted in favour of the iron ore miner’s proposed debt-for-equity swap, with the fate of the scheme, and the company, now in the hands of shareholders who will vote next week.

Atlas announced that the resolution was passed by its lenders through a vote today, which sent the company’s share price up 9 per cent to 2.4 cents a share at midday.

However, shareholder approval will be required for the scheme to be implemented.

Shareholders will vote on Wednesday.

If the scheme is approved, Atlas’s debt will be slashed in half to $US135 million, while its annual cash interest expenses will fall by about 65 per cent.

Atlas’s lenders will also end up owning 70 per cent of the company’s shares.

The news comes a day after Atlas reported a record shipment of 3.9 million wet metric tonnes of iron ore during the March quarter, with cash costs down 9 per cent to $49/wmt.