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Restructuring cuts Atlas Iron's US$267M debt to US$135M

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Restructuring cuts Atlas Iron's US$267M debt to US$135M

Atlas Iron Ltd.said May 6 that it has implemented its previouslyannounced debt restructuring program, reducing the principal amountunder its Term Loan B to US$135 million from about US$267 million in December lastyear.

The restructuring program covers the debt-for-equity swap deal,which Atlas Iron reachedwith majority of its creditors in December 2015, giving the lenders 70% of the company'sshares in exchange for the US$132 million debt cut.

In accordance with the deal, Atlas Iron issued 6,229,503,087common shares and 4,513,986,260 options to its Term Loan B lenders. The optionsare exercisable at 7.5 Australian cents each on or before July 31, 2017.

Furthermore, the maturity date on the reduced debt was also extendedto until April 2021 from December 2017 and Atlas Iron's annual interest bill willbe slashed by 65% to about A$20 million, effective this month.

The restructuring scheme also includes a revised asset coverageratio covenant, requiring Atlas Iron to have at least A$35 million in cash at theend of each month, among others.

As part of the program, Eugene Davis, Alan Carr and Daniel Harrishave been appointed to the miner's board, while Ken Brinsden and Jeff Dowling haveagreed to resign as company directors, effective immediately.

S&P Global Ratings downgraded the company's credit ratingto CC from CCC+, with a negative outlook, following the announcement of the restructuringprogram last year, referring to the deal as a "distressed debt exchange equivalentto a de-facto default."

S&P Global Ratingsand SNL Metals & Mining are owned by S&P Global Inc.