Talvivaara launches €260m cash call to improve finances

FINNISH miner Talvivaara yesterday said it will launch a rights issue, as it swung to a loss of €104m (£67m) over 2012.

It hopes that its €260m cash call will help to shore up its balance sheet as the miner recovers from a year that has seen a mine closure and the company being demoted from the FTSE 250.

The placing will help to secure liquidity for future operations, provide an appropriate capital structure for refinancing and satisfy conditions for a revolving credit facility, Talvivaara said yesterday.

“Production challenges suffered over the course of 2012 have underlined the need to focus on stabilising and improving Talvivaara’s production processes in order to return to a sustainable ramp-up towards the targeted full capacity of 50,000 tonnes of nickel per year,” said Tapani Jarvinen, chairman of the firm.

Over the year, Talvivaara has faced some considerable production obstacles, as well as a battling a weak nickel price.

Output for the full year came in below target – for the third year in a row – at 12,916 tonnes of nickel, and in September a water imbalance forced the miner to stop production, and it closed its mine in November due to a leak.

Talvivaara is currently working on ramping up production and removing excess water from the mine site.

ADVISERS TALVIVAARA

GUSTAV STEUCH
BNP PARIBAS

Gustav Steuch, head of corporate finance for the Nordics region at BNP Paribas, worked on Talvivaara’s €260m rights issue.

Having studied at Copenhagen Business School, Steuch is also head of equity capital markets for the bank for the Nordics and Netherlands regions.

The banker joined BNP Paribas in November 2007, and led the development of the bank’s equity capital markets franchise in the Nordics and Netherlands.

He started his career at Danske Bank corporate finance in 1998, working on both mergers & acquisitions and equity capital markets projects.

He became head of equity capital markets at Danske Bank in 2002.

Also involved in the rights issue were JP Morgan and Bank of American Merrill Lynch in London, and Nordic-based banks Danske and Nordea. They are all underwriting the issue.

College Hill had a role in the cash call as the public relations adviser for Finland-focused Talvivaara.