Allied Nevada Gold Files for Bankruptcy Protection

Allied Nevada Gold (TSX:ANV) announced it has filed for chapter 11 bankruptcy protection in conjunction with a financial restructuring agreement. The agreement was made with certain holders of Allied Nevada’s senior unsecured notes and secured bank lenders to reduce its funded debt obligations and to provide the company with additional liquidity.

As quoted in the press release:

In conjunction with the chapter 11 filing, Allied Nevada entered into a restructuring support agreement with noteholders collectively owning or controlling in excess of 67% of the aggregate outstanding principal amount of the Company’s Notes and the Company’s secured bank lenders. In this agreement, the supporting noteholders and secured bank lenders committed to support the restructuring transaction, which includes a restructuring of the Company’s debt and equity (which consists of the Company’s common stock and existing warrants to purchase common stock).

The Company and the supporting noteholders have also agreed on a $78 million debtor in possession (DIP) secured credit facility. The Company plans to use this DIP financing to maintain business-as-usual operations during the restructuring process. The Company believes its current and anticipated cash resources will be sufficient to pay its expenses and maintain its business operations during the pendency of its chapter 11 cases.

The Company has filed customary “First Day Motions” with the Bankruptcy Court, which, if granted, will help ensure a smooth transition to chapter 11. The motions are expected to be addressed promptly by the Bankruptcy Court.

Click here to read the Allied Nevada Gold (TSX:ANV) press release