March 6, 2018 / 9:57 AM / 2 years ago

Finland's former Talvivaara files for bankruptcy

HELSINKI (Reuters) - Finland’s Ahtium Oyj, previously named Talvivaara Mining Company, which ran a troubled nickel mine in northern Finland, has filed for bankruptcy after failing to secure financing for future projects, it said on Tuesday.

FILE PHOTO: Pekka Pera, CEO of Talvivaara, listens to a question during the Reuters Global Mining and Steel Summit at the offices of Thomson Reuters in the Canary Wharf financial district of London, Britain March 9, 2010. REUTERS/Simon Newman/File Photo

Ahtium is the former owner of the mine that leaked waste water in 2012 and faced serious production problems, prompting the Finnish government to take control of the mine in 2015 in an effort to protect local jobs and the environment.

The company, while still named Talvivaara, listed in London in 2007 with the aim of becoming Europe’s biggest nickel mine by pioneering a process of using bacteria to extract nickel.

But after the environmental damage, Talvivaara was placed into debt restructuring and the government set up a company called Terrafame to ramp up the mine in 2015. Commodities trader Trafigura took a stake in the mine last year.

Talvivaara has since tried to find new business under its new name.

“During the last four years, the company has been able to complete the corporate reorganization proceedings and clean up its balance sheet. Unfortunately developing the company’s own business projects, acquiring new businesses and securing financing for these actions proved an overwhelming task,” Ahtium Chairman Tapani Jarvinen said in a statement.

In 2016 a Finnish court fined the company and its founder Pekka Pera for environmental damage.

Pera was also handed a suspended eight month sentence last year after a court ruled that the company misled investors by giving unrealistic forecasts for nickel production in 2012-2013. Pera and the company have appealed against both rulings.

Ahtium still has about 80,000 Finnish shareholders and its shares have been suspended from trading since 2014.

The Finnish state, which helped the company until 2013 by backstopping its rights issues, had already written off the value of its 7.6 percent stake in the company.

“It was a known fact that they had little cash and few options left,” said Pauli Anttila, investment director at government investment arm Solidium, which handled the state’s Ahtium stake.

“What is positive about the Talvivaara story is that Terrafame is continuing the (mining) operation, so the process is really working.”

Reporting by Tuomas Forsell and Jussi Rosendahl; Editing by Louise Heavens and David Goodman

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