UPDATE 1-Talvivaara secures 261 mln euros in funds after leaks

Mon Apr 15, 2013 9:18am EDT

Related Topics

* Talvivaara hit by waste water leaks

* Rights issue oversubscribed, underwriting not used

* Finnish state investment firm Solidium is biggest owner (Adds Solidium comment, background on Sotkamo mine)

HELSINKI, April 15 (Reuters) - Finnish mining company Talvivaara said it succeeded in raising 261 million euros ($341.85 million) in a rights issue to keep its mine running, securing a chance to recover from its costly waste water leaks.

Talvivaara's Sotkamo mine, once hailed as a pioneer in a nickel extraction process called bioheapleaching, has been hit by a series of problems including a November accident in which toxic waste leaked into nearby waters and halted production for weeks.

There were concerns some investors could back out of the rights issue after a new leak was discovered a week ago, particularly after pension insurance firm Ilmarinen cancelled its subscription and sold off its 5.08 percent stake.

But Talvivaara said on Monday that the rights issue was oversubscribed and banks' underwriting was not used.

Finland's state investment fund Solidium boosted its stake to 16.7 percent from a previous 8.9 percent to become the miner's top shareholder. It invested 47 million euros in the rights issue.

"Talvivaara has faced significant problems in its operation, but we continue to support the company while it aims to solve its problems and we continue to believe in the company," Solidium's Managing Director Kari Jarvinen said in a statement.

While the rights issue diluted the value of existing shares, it was considered crucial to ensure the company could roll over debt maturing in May.

Shares in Talvivaara were down around 2 percent in Helsinki and London bourses and were trading at 0.16 euros and 0.14 pounds by 1315 GMT. ($1 = 0.7635 euros) (Reporting by Terhi Kinnunen; Editing by Ritsuko Ando)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.