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Audley Capital Advisors LLP to lead a consortium to invest in Talvivaara

Ministry of Economic Affairs and Employment 12.3.2015 9.00
Press release

Joint press release                                                                      

Audley Capital Advisors LLP ("Audley")

State of Finland (Ministry of Employment and the Economy)

Bankruptcy Estate of Talvivaara Sotkamo Oy/Ltd

Audley Capital Advisors LLP ("Audley"), a UK-based investment and capital advisory firm, has entered into a conditional asset purchase agreement to acquire the assets of Talvivaara Sotkamo Ltd from its Bankruptcy Estate. At the same time, the State of Finland, through its wholly-owned special purpose company Terrafame Ltd ("Terrafame"), has entered into an investment agreement with Audley. The purpose of the asset purchase agreement and the investment agreement is to re-establish the operations and continue the business of the Talvivaara mine on a viable, long-term basis within a new mining company that will be established in connection with the transaction.

The Audley Consortium is to become the lead investor and operator with an 85 per cent ownership interest in the new mining company. The Consortium is to consist of a number of parties including a globally recognised financing partner investing alongside Audley. Additional technical expertise is to be provided by SRK Consulting (UK) Limited ("SRK"), a leading consultancy in the mining and metals sector. Terrafame will own the remaining 15 per cent of the new mining company.

Mr John MacKenzie from Audley is to be appointed as the CEO of the new mining company. Mr MacKenzie has considerable experience in the mining industry globally. He was previously CEO of Anglo American's copper business, prior to which he was CEO of the Anglo American zinc business and general manager of a nickel mine and processing plant.

In addition to the purchase price, the Audley Consortium and Terrafame intend to inject a substantial amount of new funds for the restart of the mine, amounting to a total of over EUR 200 million. As part of the transaction, Terrafame will provide an indemnity in the context of environmental legacy issues, the principles of which have been agreed between Audley and Terrafame on commercial, arm's length terms.

Before the transaction can close and operations at the mine can be ramped up under the direction of the new mining company, a number of steps must still take place including the provision of the necessary regulatory permits and the obtaining of committed financing.

The parties have agreed that the purchase price will not be disclosed. Closing is expected to take place during the summer 2015 until which time the business will be maintained and managed by the Bankruptcy Estate.

Minister of Economic Affairs Jan Vapaavuori comments that the agreement is an important step, but underlines that the agreement is conditional and there are major uncertainties concerning the closing of the transaction. "If completed, the deal signed with Audley will provide sufficient financing to develop the mining operations and Talvivaara with new managerial talent. These are also preconditions for long-term, environmentally sustainable and profitable business", says Minister Vapaavuori.

"The transaction to be completed would support both the position of the employees and minimization of the environmental risks. All efforts will be made in order to finalize the transaction", says Jari Salminen, Bankruptcy Estate of Talvivaara Sotkamo Ltd.

Audley is an investment and capital advisory firm co-founded by Mr Julian Treger, which for the past 10 years has focused primarily on investing in the natural resources sector. Audley has completed a number of significant transactions and created substantial shareholder value, including the rescue financing, turnaround and eventual sale of Western Coal for more than USD 3 billion, the $250 million financing and management overhaul of Firestone Diamonds and the creation of Mandalay Resources, the gold, silver and antimony company, which is now worth about USD 300 million.  

"We are delighted to have the opportunity to invest in Talvivaara and in Finland. We believe we have assembled the right team with the right skillset to overcome the historic difficulties of the mine and create a viable and sustainable, world-class mining operation in Sotkamo for the benefit of all stakeholders", says Mr Treger.

"Following an extensive due diligence process, we are convinced that Talvivaara can be developed into a profitable business which will make a meaningful contribution to the Finnish economy", says Mr MacKenzie. "We recognize the critical importance of managing the business in a safe, environmentally responsible and sustainable manner and building the trust of local and national stakeholders."

Further information may be obtained:

Special Adviser to the Minister of Economic Affairs, Laura Manninen, mobile +358 50 361 7511, email: [email protected]

Public receiver, Attorney-at-Law, Mr Jari Salminen, mobile +358 40 900 2540, email: [email protected]

Audley Capital Advisors LLP, Mr John MacKenzie, tel. +44 20 7529 6920, email: [email protected]

Audley Capital Advisors LLP is a London-based independent investment and capital advisory firm authorised and regulated by the Financial Conduct Authority in the United Kingdom.

Terrafame Ltd is a special purpose company, which is wholly-owned by the State of Finland and has been set up to act on behalf of the State of Finland in relation to the Talvivaara assets.

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