Will Allied Nevada Gold Corp. (OTCMKTS:ANVGQ) Get Bankruptcy Protection?

Allied Nevada Gold Corp. (OTCMKTS:ANVGQ) is seeking for Chapter 11 bankruptcy protection in order to work out a debt-reducing agreement with creditors. It doesn’t have necessary funds to support its business. The bankruptcy protection will provide with the necessary capital and pave the way for restructuring measures. It is even offering warrants to existing shareholders. However, the value of warrants will largely depend on how the company performs after competing bankruptcy proceedings. Following the voluntary bankruptcy protection, the company’s shares were delisted from NYSE on March 10, 2015.

Decline in commodity prices

Allied Nevada mines and processes commodities including silver and gold. The company stated that the sharp decline in commodity prices is the prime reason behind dismal financial performance of the company. Also, its several expansion projects were delayed due to uncontrollable factors. The currency swap impact and an overleveraged capital structured further hampered the performance. Allied Nevada confirmed that it has cash of $4.5 million and intends to get a $78 million bankruptcy loan for supporting its business.

Lenders support

Allied Nevada Gold Corp. (OTCMKTS:ANVGQ) reported that its financial restructuring plans are backed by secured bank lenders. The holders of senior unsecured bonds are also in favor of its plans. The company intends to pay in-full to trade creditors. In the filed documents, Allied Nevada mentioned its assets value above $941 million and debts stands at $663 million. Its major shareholders are Pershing Trading Co. LP, Van Eck Assoc. Corp. BlackRock Institutional Trust Co., and Columbia Wanger Asset Management LLC.

The other details

In other news, Allied Nevada updated on the delisting review. TSX is reviewing its common shares in relation to meeting the defined guidelines for continued trading on TSX platform pursuant to the Expedited Review Process. The common shares of the company are suspended from trading on TSX immediately. ANVGQ stocks declined more than 26% to close at $0.106 on its second trading day on the OTC platform.

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