GEOSENTRIC OYJ STOCK EXCHANGE RELEASE December 4, 2012 at 10:30
FUNDING UPDATE, STATUS OF FUNDING TO SECURE THE COMPANY’S FUNDING NEEDS THROUGH 2013
As previously announced on November 8, 2012, the Company has received the full amount (€350,000) of its current secured loan and has sufficient cash for operations into Q1 2013. As further announced on November 6, 2012 the Company is exploring all options available to it to ensure that it has sufficient liquidity to secure its operations through 2013 and possibly beyond, and its other funding needs including repayment of the current secured loan note and raising required funds to participate in the upcoming funding round of GeoSolutions Holding N.V. (”GHNV”). And as further announced on 14 November 2012, the Board had resolved to issue a new secured interest-bearing loan note.
Subsequently, the Board wrote to its known major shareholders seeking to raise, through this instrument, a minimum of €1,000,000, and potentially up to €1,550,000, depending on investor appetite. The proposed note would use the currently approximately 24% equity investment that the Company holds in GHNV as security. The schedule for this offer required the offering to be closed and the subscribed Loan Notes be paid to the bank account of the Company on or before 21 December 2012.
The Company now reports that it has not yet received any investment commitments. The Company will continue to hold the offering open until December 21, 2012 and the Board will again contact the known major shareholders and request urgent feedback from them to indicate if there are other terms or instruments that may be more acceptable or attractive to investors to enable the Company to secure the required funding. In the absence of identifying any viable alternatives, the Board would be left with no choice other than to seek an orderly disposal of the Company’s assets (which comprise almost entirely of its 24% equity investment in GHNV), which ultimately could lead to a winding up of the Company. Given the current secured loan and related pledge on the Company’s shares of GHNV, this is likely to lead to equity shareholders receiving no final capital distribution on a winding up.
Meanwhile, the Board continues to retain and pursue, where appropriate, all realistic strategic options open to it in order to raise the necessary finance including another directed share offering, further cost cutting measures where possible, asset sales and other possible sources of external finance. If the Company does not succeed in raising the required additional funding, it may lose all or part of its holding in GHNV either as a result of realization of the pledge on the current secured loan or further dilution from the other shareholders’ investment in GHNV based on the cash call.
GEOSENTRIC OYJ
Board of Directors
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