Talvivaara Jumps as Finnish Court Starts Restructuring

Talvivaara Mining Co. (TALV), the Finnish nickel miner struggling to avoid bankruptcy, jumped the most in London trading since it first sold shares after a court started a restructuring process.

The shares advanced as much as 76 percent, the steepest intraday gain since the initial public offering in 2007. The district court of Espoo, where Talvivaara is based, “has taken the decision to commence a corporate reorganization process in respect of Talvivaara Mining Company,” it said in a statement.

Talvivaara filed for a corporate reorganization on Nov. 15 to raise funds and avoid bankruptcy. The company has suffered from falling nickel prices and a slow ramp-up at its mine in northern Finland, forcing it to seek fundraising help from investors and creditors. The court has given Talvivaara Sotkamo Ltd., the entity operating the nickel mine, until Dec. 18 to provide additional information for its reorganization, the company said today.

Nyrstar NV (NYR), which buys zinc concentrate from Talvivaara, said yesterday that it had withdrawn support for the restructuring after negotiations to find funds failed. Talvivaara reported a net loss of 29.9 million euros ($41 million) for the third quarter.

The stock was 2.215 pence higher at 5.50 pence by 9:59 a.m. in London, paring its loss this year to 80 percent. More than five times the three-month daily average volume of shares had been traded.

Job Losses

Bankruptcy would lead to the loss of 1,600 direct jobs, Chief Executive Officer Pekka Pera said earlier this month. The company has said it has “no exact plans” on the number of job cuts needed in the reorganization. Talvivaara, which had cash of about 46.5 million euros at the end of September, is reducing operations at the mine to save funds, Pera said.

Talvivaara withdrew a 2013 nickel production forecast of 18,000 metric tons in July after producing 4,508 tons of nickel in the first half. It produced 2,595 tons of the metal and 5,645 tons of zinc in the third quarter. At current nickel prices, Talvivaara needs to produce 30,000 tons of nickel a year to be profitable, according to its CEO.

To contact the reporter on this story: Thomas Biesheuvel in London at tbiesheuvel@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

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