Northland bondholders asked to approve funding for recovery actions

By Kali Hays

New York, Dec. 12 – Northland Resources SE bondholder trustee Nordic Trustee ASA will hold a meeting of secured bondholders on Dec. 19 to approve a release agreement with the company’s liquidator providing funding for recovery actions, according to the release.

Bonds covered by the consent solicitation are Northland Resources AB’s 11% super senior bridge bonds and two issues of 15% first lien bonds and Northland Resources SE’s two issues of 13% second lien bonds.

The meeting will be held at 7 a.m. ET on Dec. 19.

Under the proposed instructions to the trustee, bondholders will release their security interests so that Swedish subsidiary Northland Resources AB will provide $1.5 million per month to secure administrative expenses, maintain asset value, and for the trustee to recover bondholder interests. The transfers will be final and not subject to clawback if the liquidators decide the trustee is entitled to a separate recovery related to the Swedish subsidiaries.

An initial release of $2 million along with a release of $1.5 million is also included in the agreement and subject to bondholder consent.

Remaining funds of Northland Resources AB will continue to be blocked unless further release agreements are approved by the company’s receiver or rights to the funds have been ordered by the Lulea District Court.

Similar agreements are expected to be required for other Northland subsidiaries located in Sweden, according to the release.

In addition, bondholders will be asked to approve the trustee to enforce all account pledges securing bonds and an escrow account pledge secured under the super senior bridge bond agreement and “any other actions and measures necessary to realize the security interests.”

As previously reported, Northland and its group entities in Sweden, Norway and Finland announced bankruptcy filings on Dec. 8.

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

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