Anaconda to start talks on restructuring Murrin Murrin bonds, warns on default

New York, Feb. 28 - Anaconda Nickel Ltd. said it will begin talks with investors on restructuring the bonds issued by its subsidiary Murrin Murrin Holdings Pty Ltd.

Given Anaconda's current financial position, Murrin Murrin "may well go into default in the short term in relation to its interest and debts service reserve account obligations," Anaconda chief executive officer Peter Johnston said in a news release.

Anaconda also disclosed that Murrin Murrin has been in default under its bond indentures since November 1999 and does not expect to be able to replenish the debt service reserve account by $15.9 million in March 2002 as required by the indenture.

Failure to do so would be an event of default, the company said.

Anaconda also said it has hired investment bank Lazard Freres & Co LLC and its Australian affiliate The Caliburn Partnership to advise on restructuring the debt.

The company also said it is in an advanced stage of negotiations with Glencore for a further drawdown of $8.5 million from the Glencore working capital facility. Glencore is Anaconda's largest shareholder at 33.8% and is a joint venture partner in the Murrin Murrin Nickel Cobalt Operation with a 40% stake.

Anaconda announced a loss of A$457.534 million for the half year to Dec. 31, 2001 including an operating loss of $46 million and write downs and financing costs of $411 million.

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