Talvivaara and Terrafame have executed agreements on the sale of mining-related assets to Terrafame
July 01 2016 - 10:38AM
Stock Exchange
Release
Talvivaara Mining Company Plc
1 July 2016
Talvivaara and
Terrafame have executed agreements on the sale of mining-related
assets to Terrafame
Talvivaara Mining Company Plc
("Talvivaara" and "Company") and Terrafame Ltd ("Terrafame") have
on 30 June 2016 signed agreements, in which the parties agree on
the sale of Talvivaara's assets related to the Sotkamo mining
operations and settlement of Talvivaara's guarantee liabilities
under the Loan and Streaming Holiday Agreement ("Holiday
Agreement"), with the principal amount of approximately EUR 14
million (including interest up until 30 June 2016), and the Zinc in
Concentrate Purchase Agreement ("Streaming Agreement"), amounting
to approximately EUR 203.4 million. The assets sold include, among
others, the lime plant needed for the Sotkamo operations,
laboratory, as well as rights to the geological, laboratory and
production related data associated with the Sotkamo mine. The
agreements include a cancellation clause whereby the transactions
contemplated by the agreements shall become null and void in the
event the extraordinary general meeting of shareholders of
Talvivaara to be separately convened to address the matter does not
approve the transactions under the agreements.
In addition, the parties have
agreed on the transfer of the laboratory personnel to Terrafame as
old employees, as well as on the possibility for Terrafame to
recruit certain of Talvivaara's personnel currently providing
services related to operation of the mine. The parties have agreed
to terminate the service agreement and the lime plant lease
agreement of 19 November 2014, which were transferred to Terrafame
on 14 August 2015 with immediate effect.
The purchase price for the assets
sold consists of two components: (i) a full and final settlement of
the guarantee liabilities of the Company under the Holiday
Agreement and the Streaming Agreement, and (ii) a cash component of
EUR 1.4 million payable by Terrafame, which has been paid to the
Company at closing.
The extraordinary general meeting
of shareholders will be separately convened to address the matter.
Certain shareholders of the Company, comprising of Solidium Ltd and
Mr. Pekka Perä, CEO of Talvivaara, who together represent
approximately 20 per cent of the ordinary shares currently issued
and outstanding (excluding 192,883,000 shares held in treasury by
the Company not carrying any voting rights), have preliminary
agreed to vote in favour of the transaction at the extraordinary
general meeting.
Should the general meeting not
approve the transactions under the agreements, the agreements will
be cancelled and the transactions revoked and, consequently, the
parties would resume the positions existing immediately prior to
signing the agreements.
Under the agreements, all main
assets of Talvivaara previously generating income for Talvivaara
have been transferred to Terrafame. However, the arrangement will
materially improve the possibility for the completion of
Talvivaara's corporate restructuring proceedings and facilitate the
development of Talvivaara's new business opportunities. The
agreement has no effect on the identified restructuring debts of
the Company, including the receivables of certain commercial banks
and Finnvera Plc.
Despite the transaction published
today, there can to date be no guarantee that Talvivaara will
eventually be able to successfully complete the corporate
restructuring proceedings.
Enquiries
Talvivaara Mining Company Plc. Tel. +358 20
7129 800
Pekka Perä, CEO
Pekka Erkinheimo, Deputy CEO
Talvivaara and Terrafame have
executed agreements on sale of assets
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Talvivaaran Kaivososakeyhtiö Oyj via
Globenewswire
HUG#2024897
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