Dannemora Mineral: balance sheet restructuring needed to raise capital

By Caroline Salls

Pittsburgh, Dec. 2 - Dannemora Mineral AB said a comprehensive restructuring of its balance sheet will be needed to accommodate raising new capital.

According to a company news release, the company and its advisers have been seeking the new financing necessary to realize its investment program, but the capital raising has proved challenging.

Although these efforts are still ongoing, Dannemora said it is becoming increasingly evident that the restructuring will be necessary.

As a result, the company said it is in a constructive dialogue with major creditors, including trade creditors/suppliers and senior bondholders.

As previously reported, Dannemora is currently not paying interest on its debt understanding agreement with the senior bondholders and most of its convertible bondholders.

The company said significant investments are needed to improve its recovery rate and the output of finished products. In the absence of these investments, Dannemora said it is unlikely that it will be able to operate profitably on a sustainable basis.

According to the release, the demand for Dannemora Mineral's products has been strong, and all available production for 2013 is sold out at good price levels. The company said its recovery rate continues to stay at levels above 40%.

Dannemora is an iron ore producer based in Danderyd, Sweden.

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