Talvivaara Mining: Debt to be greater than assets after restructuring

By Caroline Salls

Pittsburgh, Oct. 29 – Talvivaara Mining Co. plc said its assets will likely still be less than the total amount of its remaining debt after its restructuring, according to a news release.

Specifically, Talvivvara said its assets would less than the total amount of its remaining debt following a proposed 99% haircut of unsecured restructuring debts or even following a 100% conversion of the unsecured restructuring debts into company equity.

The company said the exact amount of the negative funding balance will depend on the extent to which unsecured restructuring debts are converted into equity, as well as on the total amount of Talvivaara’s other debt not subject to restructuring on the effective date of its restructuring program.

As previously reported, the final draft restructuring program was filed by the company’s administrator on March 13, 2015.

The total amount of the restructuring debts to be taken into account in the restructuring proceedings is about €513 million, out of which €508 million is considered unsecured debt. In addition, the company said it has a roughly €8 million debt related to a granted third-party security.

According to the release, restructuring debts secured by a business mortgage will not be cut, and no payments would be made on debts with lowest priority. The final draft restructuring program does not include an obligation to make supplementary payments.

Talvivaara said the confirmation and completion of the restructuring program is still subject to a number of conditions related to its business and financing arrangements.

The company said it had €4.7 million in cash and cash equivalents as of Oct. 28.

In addition, the company said it received a €700,000 recovery claim from the bankruptcy estate of Talvivaara Sotkamo in connection with payments made in November 2014.

Talvivaara Sotkamo’s bankruptcy estate is asking the company to pay the claim or show cause why it should not be paid by Nov. 2.

Talvivaara Mining said it contests the claim, as the payments have been a part of the regular and established service invoicing applied between the companies for a number of years.

Helsinki-based Talvivaara Mining is a base metals producer with its primary focus on nickel and zinc.

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