November 26, 2013 / 1:52 PM / 4 years ago

REFILE-Talvivaara's top creditor withdraws support for reorganisation

* Nyrstar has withdrawn support for Talvivaara overhaul

* Analyst sees the miner’s debt restructuring uncertain

* Creditors include Nordea, Finnvera and Varma

* Talvivaara shares fall 5 pct

By Jussi Rosendahl

HELSINKI, Nov 26 (Reuters) - Indebted Finnish miner Talvivaara said on Tuesday its biggest creditor, zinc producer Nyrstar, has withdrawn support for its court application for a corporate restructuring, prompting the court to ask for more information.

Talvivaara, hit by falling nickel prices and chronic production problems, earlier this month halted operations and petitioned the Espoo District Court near Helsinki for a court-supervised reorganisation and warned it might face bankruptcy if the process failed.

But the court on Tuesday said it wanted the company to provide more information and Talvivaara later confirmed that Nyrstar, the world’s largest zinc producer which had contracted to take Talvivaara’s future output of zinc concentrate, had withdrawn its support.

Nyrstar had paid Talvivaara 232 million euros ($313 million) in advance for zinc deliveries, making it the miner’s biggest creditor, court documents showed.

Last week Talvivaara said un-named stakeholders had baulked at providing additional funds to help restructure debts of more than 300 million euros ($400 million).

Analyst Antti Viljakainen from Inderes Equity Research said it looked like Talvivaara now needed to find new supporters to enter the overhaul process.

“It was surprising that Nyrstar withdrew. Until now they have been one of Talvivaara’s most patient supporters,” he said.

“Apparently Nyrstar’s restructuring support was prominent, and I assume Talvivaara now has to ask other creditors for recommendations.”

No-one at Nyrstar was immediately available for comment.

The miner’s other creditors include Nordea Pankki Suomi with receivables of around 130 million euros. Government agency Finnvera is owed 58 million euros and pension fund Varma 34 million euros, while Canada-based uranium miner Cameco Corp has advanced the company 54 million euros.

Atradius Credit Insurance N.V., Danske Bank, Pohjola and Handelsbanken are also in the list with smaller receivables, along with more than 200 other creditors, according to the court documents.

The Finnish banks and Finnvera support the restructuring, and Talvivaara has to submit more information to the court by Nov 29.

Shares in the company were down 5 percent at 0.035 euros. Viljakainen said Talvivaara’s restructuring plan looked very uncertain.

“Even if they were admitted to the debt restructuring, and that would succeed, it would still help them only up to a point. They must fix their operational problems to boost production.”

Talvivaara, once hailed as a pioneer in cost-efficient mining, has recently faced repeated setbacks from environmental troubles to operational hitches, while suffering from a drop of more than a fifth in the price of nickel since the start of the year.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below