OSLO Feb 8 The Swedish subsidiary of iron ore
miner Northland Resources has filed for court
protection against creditors to allow its parent time to
negotiate its long term financing.
Oslo-based parent Northland Resources earlier this week
failed to raise $375 million through a share and bond issue to
cover a funding shortfall at its Swedish Kaunisvaara iron ore
It now wants creditors to give its subsidiary access to $12
million on the unit's accounts to keep it operating until March
4, by when it hopes to have a long term financing solution in
"The decision is based on a shortage of liquidity and deemed
to be a necessary step to give the company the time needed to
finalise negotiations for a long-term financial solution,"
Northland Resources said in a statement.
Shares in the parent firm were nearly 20 percent lower at
1035 GMT on Friday, having lost over 90 percent of their value
since Janury 8, when it hit an 11-month high.
The Swedish unit's biggest creditor is Finnish engineering
firm Metso with an unpaid bill of around 310 million
Swedish crowns ($48.19 million), court documents showed.
Northland Resources said that it was having "constructive"
discussions with its bondholders to secure continued operations
Northland believes that negotiations with its creditors
would only concern the timing and manner of repayment of debt
and not involve writing down debt, the firm said in a document
to a Swedish court.
(Reporting by Victoria Klesty; Editing by Elaine Hardcastle)