New World says that Kuhns, chief executive officer since the company was founded, is still company chairman and will concentrate on selling assets -- New World is not ruling out selling wind-related assets -- and also on the strategic development of wind and hydro projects. Replacing Kuhns with reorganisation specialist, George Petrenko of management consultancy Glass & Associates, is a turn-around. In addition, New World's chief financial officer, Anthony Baratta, is replaced for the time being by Frederic Mayer of a chartered accountants firm.
Petrenko says assets for sale may include all operating projects and projects under development -- except for those in Ireland, Costa Rica, China and Texas in the US. Petrenko said New World hopes to sell its wind plant in Wales. Regarding the company's huge wind plant proposal in Mexico, he says, "We're trying to determine if we should proceed." Money must be raised to repay $15.7 million in notes by July 31, 1997 and also $4 million in interest for a loan by December 1 of this year. An interest payment of an unspecified amount is due on the $15.7 million notes in January 1997.
Of the possibility of bankruptcy, New World's Hank Hermann says the debt restructuring has addressed that matter. "I would assume the company would raise the $20 million. If the $20 million is not raised, negotiations between creditors and the company would resume," he added.
As interim CEO, Petrenko will implement New World's restructuring, which is to consist of shedding project investments and subsidiaries to reduce secured debt. He will also try and generate working capital for developing key wind and hydroelectric power plants. New World renegotiated with Robert Fleming & Co Ltd Group, holders of the company's $15.7 million 8% subordinated convertible loans to provide for maturity at July 31, 1997, with interest on the restructured notes paid with the issuance of additional notes and warrants until the cash interest payment due on January 31, 1997.
The restructuring includes sale of New World's equity investment in Photocomm Inc so that the wind company can retire outstanding debt earlier than otherwise possible. Also, certain funds, currently in escrow, will be released for use as working capital. And New World announced it had reached agreement in principle with holders of Sundial International Fund Limited loans of about $4 million to allow New World to delay interest payments until December while it attempts to raise money with selected collateralised asset sales.
New World said that its financial results for 1995, not yet released, will include significant write-offs, costs of restructuring and reorganisation costs, and write-downs of certain assets to net realisable values. New World, consequently, says it expects a late filing of its financial results for the year ended December 31, 1995. Petrenko could not give a date, however, for release of the "Form 10-K," as the filing to the US Securities and Exchange Commission is known.