Mr. Metals
This expands on the situation:
Reorganization under Chapter 11
Pegasus Gold Inc PGU
Shares issued 41,676,119 Jan 15 close $0.86
Fri 16 Jan 98 News Release
Mr Werner Nennecker reports
Pegasus Gold and certain of its subsidiaries have filed voluntarily to
reorganize under Chapter 11 of the Bankruptcy Code, in Reno, Nevada, to
facilitate the reorganization of the company's businesses and the
restructuring of approximately $183 million of long term debt and revolving
credit, $14 million in trade debt, and $16 million in foreign currency
losses.
With gold prices at 18 year lows, there will not be sufficient cash flow to
service the company's debt. Pegasus has been in discussions with the
revolving credit lending group since November to restructure the debt, but
no significant progress was being made in those discussions and it became
clear that to move the reorganization forward it would have to be done in a
court proceeding.
The company is convinced that its foundation is strong, and with the
successful completion of this reorganization and gold prices returning to
historically higher levels, Pegasus can once again establish its position
in the gold industry and accomplish future gold production growth.
Daily operations will continue, employees will continue to be paid, and the
company will continue to produce gold. Pegasus has a fiduciary
responsibility to its creditors, vendors, employees, and shareholders to
maximize assets and to create an appropriate corporate structure that will
permit it to take greater advantage of high growth, high return
opportunities. The company will continue to review each of its mine sites
to determine how best to maintain low cost mining operations and produce
gold.
Currently, the company has approximately $16 million in available cash, and
most of its assets are unencumbered. The company's total obligations are
approximately $213 million, which consist of $68 million under a revolving
credit agreement; $16 million in foreign currency losses; $14 million in
trade and similar obligations; and $115 million of 6.25% convertible
subordinated notes due 2002.
The American Stock Exchange has determined to delist the company as it no
longer satisfies the exchange's continued listing guidelines. The company
is not appealing that determination.
WARNING: The company relies on litigation protection for "forward-looking"
statements.
(c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com
regards
gmweber |
