Northland Resources holders vote to pass measure for 13%, 12¼% notes

By Jennifer Chiou

New York, March 15 - Northland Resources AB announced that holders of its $270 million of 13% senior secured bonds and its NOK 460 million of 12¼% senior secured bonds voted to adopt the company's proposed resolution in connection with its previous announcement that it was in voluntary debt composition in Sweden.

According to a notice from bond trustee Norsk Tillitsmann ASA, a quorum was formed at both meeting, and 99.73% of 13% bondholders voted in favor of the resolution, while all votes from holders of the 12¼% were affirmative.

As announced last month, Northland Resources sought to reach an agreement for a long-term funding solution.

At the time, the trustee said that Northland filed for reconstruction with the Lulea District Court in Sweden on Feb. 8 based on a shortage of liquidity to give the company enough time to finalize negotiations for a long-term financial solution.

Norsk Tillitsmann previously said the company entered voluntary debt composition because of its funding situation. Northland had invested more than $900 million in the Kaunisvaara project as of the end of December, and the Northland group identified a $450 million funding shortfall in January, a previous news release said.

On Feb. 7, Northland asked the trustee to release $6 million from debt service accounts, with the remaining $6 million of the credit support intended to be provided by other stakeholders. Norsk Tillitsmann said talks are ongoing with the other stakeholders.

Norsk Tillitsmann already received approvals from bondholders to release the $6 million of credit support ahead of the March 15 bondholders' meeting to formally vote on the request.

The advance will be structured as a voluntary prepayment by Northland in conjunction with and conditional upon a re-advance of those funds to the company on behalf of the bondholders in order to gain the benefit of priority ranking.

Northland is a Luxembourg-based producer of iron ore concentrate.

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