The world’s largest zinc producer, Swiss company Nyrstar, has been revealed as the latest creditor to refuse to back the heavily-indebted Talvivaara mine.
As it is Talvivaara’s largest creditor, Nyrstar’s withdrawal on Tuesday prompted the Espoo District Court to withhold a decision on the mine’s application for restructuring.
District Court judge Tiina Veranen says that at present 15 debtors are prepared to support the restructuring application for Talvivaara Sotkamo Ltd, while seven are backing the restructuring of its parent company Talvivaara Mining Company Ltd. Veranen did not comment on the effect on the application of Nyrstar retracting its endorsement. However, due to the changed circumstances, the court is demanding further information before it passes judgement.
Talvivaara owes around one billion euros to its creditors. The Espoo District Court is charged with deciding on the matter of Talvivaara’s application for restructuring, which the mining company hopes will improve its presently dire business prospects.
Talvivaara is indebted to Nyrstar to the tune of some $170.5 million.
Retraction comes as surprise blow
Antti Viljakainen, an analyst at Inderes Equity Research, says Talvivaara must now seek new backers if it wants to get the overhaul approved.
“It was surprising that Nyrstar withdrew,” says Viljakainen. “Until now they have been one of Talvivaara’s most patient supporters.”
The mine’s other creditors include banking group Nordea, government financing agency Finnvera and pension fund Varma, alongside some 200 others.
The mining company must submit further information to the court by Nov. 29. Its management has claimed that if the firm is unable to restructure, it will be forced to file for bankruptcy.
This story is posted on Alaska Dispatch as part of Eye on the Arctic, a collaborative partnership between public and private circumpolar media organizations.