Allied Nevada Gold Corp. (OTCMKTS:ANVGQ) filed for Chapter 11 bankruptcy protection to materialize a debt-reducing deal with creditors. It will allow the company to get the necessary capital to support business. Also, restructuring measures will make way for further proceedings to court. The company is offering warrants to existing shareholders that may fetch some value, depending on how Allied performs after exiting bankruptcy. ANV shares were delisted by the NYSE on March 10, 2015 after Allied Nevada filed for voluntary bankruptcy protection under the Bankruptcy Code with the U.S. Bankruptcy Court.
Dismal financial performance
Allied Nevada Gold Corp. (OTCMKTS:ANVGQ), which mines and processes silver as well as gold, blamed its dismal financial performance on the decline in commodity prices in recent years. The delays in expansion project, currency swap exposure, and an overleveraged capital structure contributed equally in the poor show. As of Tuesday, the company holds cash of almost $4.5million. It is looking for $78 million bankruptcy loan that can help it to support its declining business.
The financial restructuring plans of Allied are getting support from its secured bank lenders and also from holders who own over 67% of its senior unsecured bonds. The company confirmed that trade creditors will be given full payment. As per the documents filed in the court, the assets of Allied are valued at over $941 million and the debts are over $663 million. The major shareholders in Allied are Pershing Trading Co. LP, BlackRock Institutional Trust Co., Van Eck Assoc. Corp. and Columbia Wanger Asset Management LLC.
TSX Delisting Review
In unrelated news, Allied Nevada informed about the delisting review. It stated that TSX is reviewing the company’s common shares with respect to fulfilling the requirements for continued listing on TSX pursuant to the Expedited Review Process. Allied Nevada’s common shares are suspended from trading on TSX immediately. The company stocks surged more than 36% to close at $0.144 on its first trading day on the OTC platform.