UPDATE 1-Nickel miner Talvivaara gets debt cut plan, still lacks financing – by Jussi Rosendahl (Reuters U.S. – September 30, 2014)

http://www.reuters.com/

HELSINKI, Sept 30 (Reuters) – Finnish nickel miner Talvivaara lacks the long-term financing it needs to avoid bankruptcy, it said on Tuesday after an administrator proposed an eight-year restructuring plan that includes slashing its debts by up to 99 percent.

Talvivaara listed to great fanfare in London in 2007 when nickel peaked at around $51,000 per tonne.

But nickel prices have more than halved, and hurt by repeated production disruptions and environmental damage, the company last year suspended its mining operations and started a court-led debt restructuring process to avoid bankruptcy.

The administrator on Tuesday proposed Talvivaara’s unsecured debts of around 1.4 billion euros ($1.8 billion), including group internal debt, be cut by 97-99 percent. The plan could involve a share issue, which the administrator warned could dilute the company’s shares.

It shares fell as much as 24 percent on Tuesday. The company lamented on Tuesday that implementing the plan would need funds and creditor support, which is does not have.

“In order to ramp-up the Talvivaara group’s mining operations to full scale, a significant amount of new financing for the operative activities is required immediately,” it said in a statement.

The government has invested 150 million euros in the company, and economy minister Jan Vapaavuori hinted on Tuesday that it could give more, but that a bailout would need the participation of a private investor or industrial partner.

“The state does not rule out a possibility to participate in a market-based financing of the company,” Vapaavuori said in a statement.

POLITICAL PRESSURE

Talvivaara has not said how much it needs, but analyst Jukka Oksaharju at brokerage Nordnet estimated a long-term solution would require several hundred million euros. “Without long-term funding, it is just hospice for this company,” Oksaharju said.

For the rest of this article, click here: http://www.reuters.com/article/2014/09/30/talvivaara-reorganisation-idUSL6N0RV1KP20140930