Talvivaara Unit to File for Bankruptcy, Nyrstar Faces ChargeKati Pohjanpalo and Firat Kayakiran
Finnish nickel miner Talvivaara Sotkamo, the operating unit of Talvivaara Mining Co., will file for bankruptcy after efforts to secure interim funding failed.
Lack of short-term working capital prevents a long-term solution, the Espoo-based parent said in a statement. Nyrstar NV faces a 176 million-euro ($220 million) impairment charge if a Talvivaara supply deal is terminated, it said separately.
Talvivaara Mining was halted on Nasdaq OMX Helsinki, while Nyrstar, the world’s largest refined-zinc producer, dropped as much as 10 percent, the biggest decline since May. It was down
7.6 percent at 2.463 euros by 1:18 p.m. in Brussels.
Talvivaara has sought funds from creditors and investors since filing for a corporate reorganization in November 2013 to try to avoid bankruptcy. The company has suffered from falling prices and a slow ramp-up at its mine in northern Finland. Pekka Jaatinen, administrator of the corporate restructuring, has given his consent to the filing, Talvivaara said today.
The company needed at least 100 million euros to 200 million euros, according to a plan for an eight-year restructuring proposal filed in September that would have cut unsecured debt by 97 percent. Talvivaara Mining is seeking to secure enough money to buy the mining operations, associated assets and rights from the bankruptcy estate.
Nyrstar, which agreed in 2010 to pay $335 million for all of Talvivaara’s zinc concentrate until 1.25 million metric tons was delivered, faces the charge by June 30. It has received 119,000 tons so far, a Nyrstar spokesman said today by phone.
“Nyrstar intends to work closely with the bankruptcy trustee upon appointment and is continuing to work proactively with key stakeholders to determine the best approach,” the Brussels-based company said. “The company will continue to offer operational support to Talvivaara Sotkamo.”