Shareholders back Atlas restructure

Atlas Iron’s creditors appear likely to own the majority of the business after shareholders voted in favour of the iron ore miner’s proposed debt-for-equity swap at a meeting today.

Nearly 98 per cent of votes were cast in favour of the scheme, which was already approved by lenders on Friday.

Assuming the Federal Court signs off on the scheme tomorrow, Atlas’s debt will be slashed in half, to $US135 million, and annual cash interest expenses will be cut by more than 65 per cent.

The company’s lenders will emerge with 70 per cent ownership in Atlas’s shares, while the maturity of the miner’s remaining debt will be extended to 2021.

At the meeting today, Atlas chair Cheryl Edwardes said there would also be changes to the company’s board as part of the restructure, including the resignation directors Ken Brinsden and Jeff Dowling.

Mr Brinsden previously served as managing director of the company.

Alan Carr, Eugene Davis and Daniel Harris will be appointed as non-executive directors on implementation of the debt restructure.

“The benefits of this restructuring will be combined with the extensive operational savings Atlas has made over the past year or so to leave your company well positioned to capitalise on any sustained, positive trends in the iron ore price,” Mrs Edwardes told shareholders.

“(The company’s) significantly lower cost base, which stands to be reduced further by the interest savings stemming from the debt restructure, enables Atlas to better withstand any future iron ore price volatility and also take greater advantage of any sustained price upswings.”

Atlas shares were unchanged at 2.3 cents each at 11:45am.