GEOSENTRIC OYJ STOCK EXCHANGE RELEASE December 28, 2012 at 13:00
FUNDING UPDATE, COMMITMENT FOR ADDITIONAL SECURED LOAN NOTE RECEIVED TO PARTICIPATE IN GHNV EQUITY FUNDING, ADDITIONAL FUNDING NEEDED TO SECURE OTHER FUNDING NEEDS
As previously announced on December 4, 2012, the Company had not by then received any investment commitments for Company’s new secured loan note and would continue to hold the offering open until December 21, 2012 and 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.
The Company now reports that it has not received any alternative funding proposals or commitments for the minimum amount of €1,000,000 requested from its known major shareholders by the deadline of the close of offering of 21 December 2012. However, an independent investment company has committed to provide an additional loan of approximately €360,000 (“Additional Loan”), on terms and conditions similar to the existing secured loan note (“Loan”), which enables the Company to participate in GeoSolutions Holdings N.V.’s (“GHNV”) equity funding round to its full pro-rata share of approximately 24% as GHNV has recently reduced its cash call amount so that the Company’s pro-rata share of the cash call has decreased from earlier approximately €540,000 to approximately €360,000. This, however, does not have material impact on Company’s previously announced overall funding needs for 2013. As the Additional Loan may be used only for the equity investment in GHNV the Company will need to raise other additional funding in early Q1 2013 to secure its short-term working capital needs.
The Additional Loan is issued on terms equal to those of the Loan, as applicable, and secured by the new GHNV shares to be issued against the Company’s full participation in GHNV’s equity funding round. The Additional Loan matures at the same time with the Loan on April 30, 2013 and is subject to a maximum redemption premium of 38.44%. The Company is entitled, in its sole discretion, to repay the Additional Loan by transferring the newly issued GHNV shares paid with the funds from the Additional Loan to the creditor instead of cash payment. In this case, the Company’s holding in GHNV would reduce to approximately 6% level assuming the Loan was repaid and the current GHNV shares securing the Loan were retained by the Company.
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 and Additional Loan or repayment of the Additional Loan by transferring the new GHNV shares subscribed with the funds from the Additional Loan to the creditor.
GEOSENTRIC OYJ
Board of Directors
Distribution:
NASDAQ OMX Helsinki
Principal news media