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Publish Date : 02-May-2013

Northland Resources S.A. announces that it supports a bondholder-led restructuring of Northland. The contemplated bond offering enables the Company to complete its Kaunisvaara Project.

The Company has reached agreements with representatives of the holders of the USD 370 million senior secured bonds issued in March 2012 by Northland Resources AB (publ), as well as the bondholders financial advisor, to restructure the existing bonds into a new second lien convertible bond with 4% interest p.a. (payable semi-annually) interest and maturity in 2020, and release the remaining amounts on the Debt Service Accounts ("DSA") to the Company.

The Company expects to launch a new USD 362 million senior secured bond offering with 12% interest and an Original Issue Discount ("OID") of 7%. Three existing restricted bondholders have signed commitment letters for an aggregate amount totaling approximately one quarter of the contemplated bond issue

A bondholder meeting is to be held on May 3, 2013 to approve the terms of the Reorganisation and the main terms of the contemplated new bond

The Company and the Administrator have also finalized a proposal regarding the repayment in part of the outstanding accounts payable in 2013, and the remaining outstanding amounts becoming interest bearing and repaid in accordance with a repayment plan. It is a condition to implementation of the proposal that the Reorganisation will have pre-acceptances from the requisite trade creditors in numbers and volume, needed to approve the reconstruction plan.

Suppliers who has provided for short term credit after entering into Reorganisation and thereby being entitled to super priority right will be repaid in full on the implementation date which is scheduled to occur by May 24 (together with any interest accrued thereon) or as otherwise agreed.

The Company is agreeing on fixed price contracts for the majority of outstanding capital expenditures with key suppliers

The Company's Board of Directors will see certain revisions as part of the Reorganisation. Three existing Directors will resign from the Board. In the interim, Mr. Leif Christian Salomonsen and Mr. Runar Nilsen will be appointed to the Board of Directors as observers. Following completion of the reorganisation four new Directors are expected to be proposed by bondholders and key suppliers

Based on the anticipated long term financing the Company will be fully funded and reach full production in second half of 2014

The Company expects to be able to emerge from Reorganisation around early July 2013 following the completion of these actions

Following the restructuring, existing shareholders will retain approximately 5.14% of the fully diluted equity of the Company.

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