Dannemora Mineral can't make March 22 bond payment, requests waivers

By Caroline Salls

Pittsburgh, March 19 - Dannemora Mineral AB does not expect to be able to make the March 22 interest payment on its 11¾% callable senior secured bond issue based on current cash-flow models and liquidity forecasts, according to a notice from bond trustee Norsk Tillitsmann ASA.

Failure to make the payment on the due date would constitute an event of default. However, Dannemora is asking bondholders to grant a temporary waiver of its requirement to make the March 22 interest payment as well as its failure to make a Sept. 22 interest payment and its breach of a minimum liquidity covenant.

The trustee said the company is in continuing talks with stakeholders, trade partners, potential investors and the bondholders regarding viable capital structure restructuring options, but any solution would not be implemented by the March 22 payment date.

According to the notice, waivers that were previously granted in connection with the Sept. 22 interest payment and the covenant breach have expired. As a result, Dannemora is asking the bondholders to extend those waivers.

Even if the waivers are granted, both interest payments will continue to bear interest from their due dates until they are paid at their applicable rates plus 5%.

The waivers would be in place until the earlier of April 7 or notification to the company of a termination event.

The bondholders' meeting is scheduled for March 26.

Dannemora Mineral is an iron ore producer based in Danderyd, Sweden.

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