Finland Times

Mining company Talvivaara announced on Thursday that its operating subsidiary Talvivaara Sotkamo Ltd has decided to apply for bankruptcy, as no solution had been reached in the short-term financing negotiations.

     Talvivaara has suffered poor profitability for years. Since the end of September, the company has been working on a restructuring proposal as a final attempt to find funding to support its weak finances.

     The financing negotiations with key stakeholders, potential new investors and the Finnish government have been conducted intensely in the past few months, said Talvivaara in a statement published on Thursday.

    

However, the ongoing negotiations have not met the mining division's short-term need for cash, even though a long term solution has been already advanced.

     The Board of Directors of Talvivaara Sotkamo, therefore, decided to file for bankruptcy.

     Talvivaara's bankruptcy filing did not come as a surprise, said Jan Vapaavuori, the Finnish Minister for Economic Affairs after the company's announcement on bankruptcy.

     Vapaavuori hoped that a new owner can be found to continue the mining operation in Finland.

The minister said  the state of Finland, which is the biggest owner of Talvivaara with 15 percent of the stock, would lose around 200 million euros , if the company went bankrupt.

    

The bankruptcy application was expected to be filed with the Espoo District Court on Thursday.

     Founded in 2004, Talvivaara, which is listed on the London and Helsinki Stock Exchanges, is a mining business operating in Finland with its primary focus on nickel and zinc.

     It has been troubled by heavy financial losses, crushing debt and serious leaks causing environmental damage, since it began to operation in 2008.

     In September this year, Talvivaara's four executives were charged with environmental crimes.