Anker Coal obtains forbearance, looks to restructure bonds

By Sara Rosenberg

New York, June 13 - Anker Coal Group Inc. said entered into a forbearance agreement with its senior secured lenders and added that it expects to start negotiations with bondholders over restructuring that debt.

"While the company does not currently know the prospect or form of a restructuring of its existing bond indebtedness, representatives of holders of a majority of the outstanding bonds have expressed their intentions to work with the company to restructure its outstanding bond indebtedness, although there can be no assurances that any agreement will be reached," the release said.

On April 1, the company missed a scheduled interest payment of about $6.6 million to bondholders. The company has received official notification of payment default from the bond trustee.

In addition, the company confirmed that its independent public accountants have not yet issued their opinion on consolidated financial statements for the period ending Dec. 31, 2001. A Form 10-K for fiscal year 2001 has not been filed with the Securities and Exchange Commission, and, according to the release, the company has no intention of filing further reports with the SEC.

"Discussions with the company's independent public accountants are focused on asset impairment issues, the accountants' willingness to issue an opinion with a going concern qualification and the company's plans to negotiate with its senior secured lenders and bondholders regarding its capital structure and debt service requirements," said Jack Teitz, president and chief restructuring officer, in a news release.

Teitz added that any restructuring negotiations with bondholders "will need to result in significant reductions" in the company's debt in order to allow it to service its obligations.

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