Sun, 17 Nov, 2013 02:00:14 AM FTimes Report, November 17
The Board of Directors of Talvivaara Mining Company Plc. on Friday said that the company was applying for reorganisation proceedings. The firm's shares are listed on the London Stock Exchange and NASDAQ-OMX Helsinki, said a press release of the Government Communications Department on Friday. “Under the current circumstances, the company views reorganisation proceedings as a way of stabilising its operations. However, opting for this alternative without a clear financial plan is an even starker illustration of the impasse reached in the previous negotiations and the critical situation faced by the company,” Vapaavuori said. Talvivaara's quarterly report issued on 7 November 2013 confirmed the gravity of the company's financial difficulties. For example, Talvivaara itself calculates that its financial position has deteriorated even further than expected. This has led the company to announce negotiations over external financing, while also preparing for reorganisation or bankruptcy proceedings as a fall-back position, according to the release. In its announcement, Talvivaara added that additional financing would be a requirement for entering and completing reorganisation proceedings. The firm also announced that it had conducted intensive discussions on possible financing with various stakeholders, referring to a proposal for EUR 40 million which the investor candidates have so far rejected. For reorganisation proceedings to begin, the applicant's business operations must be viable and financing must be adequate for staying the course of the reorganisation process. The district court will decide on whether or not reorganisation proceedings can be initiated, said the press release. The court is now considering whether Talvivaara qualifies for reorganisation proceedings. The State has kept a close eye on the firm's situation and, under the leadership of the MEE (Ministry of Employment and the Economy), it actively participated in negotiations held last week to secure financing that will enable the firm to continue and to manage its environmental risks, according to the release. The highly intense talks have involved consideration of several alternatives, but without finding a solution that will secure Talvivaara's future. No actual negotiations with the State are currently under way, stated Vapaavuori. He emphasised that the company must now ensure that the mine operates responsibly. The minister stated that the MEE will remain in contact with the company and, where possible, participate in negotiations on arranging a financial package on market terms, in which private operators will at least match the State's role in any rescue. It is important to note that the company is listed on the stock exchange. Stock exchange regulations and non-disclosure obligations prevent us from publicly announcing every detail on the company and the financial negotiations.
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