Northland announced today that a proposal for a long-term financial solution involving a bond issue of USD 335 million has been presented.
Members of a consortium consisting of Folksam, Metso, Norrskenet and Peab will invest a total of USD 100 million, or USD 25 million each, in the bonds. The investment entitles the consortium to appoint four board members of a total seven on Northland's board. The aim is to exercise the necessary influence and to bring expertise to the task of re-establishing confidence in the company.
Northland will form a new board. The consortium has proposed Olav Fjell as chairman and will propose three other members when the bond issue is fully subscribed and approved.
LKAB was invited some time ago to participate in the consortium, the aim of which is to secure a long-term financial solution for Northland. Via the jointly-owned venture capital company Norrskenet, LKAB has elected to participate with the equivalent of USD 25 million in the refinancing.
"Together with the other companies sin the consortium, we wish to re-establish confidence in Northland. This benefits not only the company, but also our region and the entire Swedish mining industry," says Lars-Eric Aaro, President and CEO, LKAB.
"LKAB has full focus on starting our new mines in the Svappavaara field and realizing our growth plans. This is a financial investment, which is why Norrskenet is participating. Norrskenet's mission is to contribute, via venture capital, in the creation of a broader economic base in our region," says Lars-Eric Aaro.
"We believe that Northland faces a very great challenge in realizing its plans for the mining project and creating long-term profitability in the company. Norrskenet's participation in the bond issue is in line with our mission to be a partner in the development of industry in our region and to invest in projects that have the potential to yield a good return," explains Per-Erik Lindvall, Chairman of Norrskenet.
Norrskenet AB is jointly owned by LKAB, business developer Expandum AB in Gällivare and Progressum i Kiruna AB. The company was established in 1997 with the aim of increasing the availability of venture capital in the region.
The consortium's investment is subject to the bond offer being fully subscribed when the subscription period ends today, 30 May, 2013, at 10 p.m.
Lars-Eric Aaro, President and CEO, LKAB, tel. +46 (0)+46-920 38106.
Per-Erik Lindvall, Chairman, Norrskenet AB, tel +46 920 38163
Anders Lindberg, Acting Senior Vice President, Communications, LKAB
Tel +46 (0)+46 72-717 8355