UPDATE 2-Talvivaara wins court backing to renegotiate debt

Tue Dec 17, 2013 10:02am EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

* Firm ended Q3 with $1.2 billion in liabilities

* To restructure debt after running low on funds

* Analysts say company will need to raise more money (Adds comments from analyst, hedge fund)

By Ritsuko Ando and Jussi Rosendahl

HELSINKI, Dec 17 (Reuters) - Struggling Finnish nickel miner Talvivaara has won court approval to renegotiate its debt, allowing the company to continue production and avoid the immediate risk of bankruptcy.

While the news sent its shares up almost 20 percent on Tuesday, analysts said the firm's future was still in doubt due to hefty liabilities, uncertainty over talks with creditors and production problems at its only mine in Sotkamo, north Finland.

"This news can be seen as diminishing their immediate risk of bankruptcy. But it is difficult to understand these share price moves. This is not that positive," said Inderes Equity Research analyst Antti Viljakainen.

"They will need new financing anyway. I don't believe they have enough cash for the whole first quarter, I think they will be pretty dry by mid-February."

Hurt by falling nickel prices and repeated production disruptions, Talvivaara sought a court-led reorganisation in November as it ran low on funds. It has been waiting for court approval to include the debt of a subsidiary, Talvivaara Sotkamo, in its reorganisation plans.   Continued...