Dannemora Mineral asks 11¾% bondholders to waive liquidity covenant

By Angela McDaniels

Tacoma, Wash., July 22 - Dannemora Mineral AB is seeking a waiver from the holders of its 11¾% callable senior secured bonds due 2016, according to a notice from bond trustee Norsk Tillitsmann ASA.

Bondholders are being asked to temporarily waive the minimum liquidity covenant, which requires the company to maintain at least SEK 50 million of liquidity.

The company is an iron ore producer based in Danderyd, Sweden. It said that a temporary decline in iron production in May means its second-quarter EBITDA will be negative, and the company expects to breach the minimum liquidity covenant in the next two weeks.

If granted, the waiver would be effective until Sept. 22.

Holders will vote on the waiver at a meeting at 7 a.m. ET on Aug. 5 in Oslo.

A group of investors holding 71% of the bonds have formed an ad hoc committee and agreed to vote in favor of the waiver.

In exchange for the waiver, the company has agreed to, among other actions, comply with a fee agreement with the committee's legal adviser, Bingham McCutchen (London) LLP, and to appoint an expert to perform technical and geological due diligence.

The holders of at least 50% of the bonds must attend the meeting in order to form a quorum. The holders of more than 50% of the bonds represented at the meeting must vote in favor of the waiver in order for it to be granted.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.