Looks like things went well at the meeting Continued Reorganization of Northland's Subsidiaries
Luxemburg, March 1, 2013 - Northland Resources S.A. (TSX: NAU, OSE:
NAUR, Frankfurt: NPK, First North/Nasdaq: NAURo - "Northland" or "the
Company") hereby announces that the preliminary reorganization plan for
the Company's Swedish subsidiaries was presented at today's meeting of
creditors. The creditors expressed their support of the continued
reorganization.
As previously announced, the Luleå District Court today held a meeting
of creditors in the companies in reorganization, Northland Resources AB
(publ), Northland Sweden AB and Northland Logistics AB.
The administrator, Lars Söderqvist, accounted for the measures
undertaken to date, such as the ongoing contacts and negotiations that
have taken place with the companies' suppliers with the objective of the
companies' operations being able to continue during the reorganization
period. Questions from suppliers and creditors have been answered on an
ongoing basis. In addition, written information on the superior right of
priority has been prepared. Furthermore, procedures have been
established for the management of payments during the reorganization of
the companies.
The earlier assessment that the companies are sufficient, i.e. that the
value of their assets exceeds that of their liabilities, remains
unchanged. It should, however, be noted that the valuation of the
assets, and thus the assessment of sufficiency, is based on a going
concern assumption, that is, the assumption that the operations will
continue over a foreseeable future. If, instead the assessment was to be
made based on sale values (liquidation values) of the individual assets,
the outcome would be uncertain.
Within the framework of the reorganization, short-term financing takes
high priority and several alternative solutions to the matter are being
examined in parallel. Among these, the following can be mentioned:
. Discussions with key suppliers on the supply of goods and services
on credit with a credit term of 45 days against collateral in the form
of superior rights of priority.
. Contacts with external financiers regarding the provision of short
-term loans against collateral in the form of superior rights of
priority.
. Negotiations with the company's principal creditors regarding
injections of liquidity.
To date, the companies have entered into an agreement regarding a loan
of USD 6 million from the bondholders. Agreements also have been entered
into with a number of suppliers regarding delivery on credit during the
reorganization.
Negotiations are currently under way regarding long-term financing. It
is expected that these negotiations will be completed during April. The
conditions for being able to reach an agreement that resolves the long
-term financing needs are judged to be favorable, which, in itself,
favors the companies' continuing their operations during this period.
At the same time the companies need to take precaution for the event
that available funds are not sufficient to support the business at
present level until the negotiations are concluded. The Board of
Directors or each company, as a first step, shall immediately reduce its
operations to a level adapted to the cash flow situation of the
companies, including the demanded short-term financing. The assessment
of the boards is that this reduction will not negatively impact the long
-term value of the business of the companies.
The Board of Directors further resolved that the companies shall reduce
its business operations to a level which in principle entails a total
halt to capital investments and focus on continued production only, in
the event the demanded short-term financing is not granted. The
assessment of the boards is that this reduction will negatively impact
the long-term value of the business of the companies.
Combined, the companies have 350 different creditors, of which the seven
largest, excluding the bond holders, account for a combined 85 percent
of the total claims volume. The companies have assets whose value
exceeds the sum of the companies' liabilities. The starting point is
thus that all creditors will receive payment in full.
The companies' creditors expressed their support for the continued
reorganization. The court appointed a creditors committee consisting of
representatives of the bondholders, major and minor creditors as well as
employees. The role of the committee is to monitor the interest of all
creditors. The administrator will also consult with the committee in
material issues within the framework of the reorganization.
The preliminary reorganization plan is available via the Company
website, www.northland.eu > investor relations > financials.
"Karl-Axel Waplan"
President & CEO, Northland Resources S.A.
For more information, please contact:
Karl-Axel Waplan, President and CEO: +46 705 104 239
Eva Kaijser, CFO, +46 709 320 901
Anders Antonsson, Vice President - Investor Relations: +46 709 994 970