Investor Presentation May 2013 - Northland Resources

Overview of Reorganization and Financing
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Restructuring of
existing USD 370m
bonds
New USD 362m
senior secured
bond issue
USD 114m
Supplier Credit
Fixed price
contracts for
remaining Capex 3
• Reinstate USD 370 million bonds to a Mandatorily Convertible Second Lien Bond in NRSA with maturity 15 October 2020
• Bond to carry 4% PIK interest (semi-annually) to 2015, cash/PIK interest thereafter subject to Free Cash Balance as defined.
• Convertible into 80.5% of Pro Forma Post Restructuring Equity in NRSA at holders option from July 2013, while Company has
option to convert from July 2018, subject to refinancing of First Lien Bond
• Release of existing approx. USD 30 million on DSA, ranking super senior until the contemplated New First Lien Bond is funded,
assumed 24 May 2013
• New First Lien USD 362 million 2019 senior secured bond in Northland Resources AB
• Issue at 7% Original Issue Discount yields net proceeds to Company of USD 337 million
• 12% PIK interest until 2016, 12% cash interest on a pay-if-you-can basis in 2016 and 12% cash interest thereafter
• New first lien bond issued with warrants representing 14.2% of the Pro Forma Post Restructuring Equity in NRSA
• USD 50 million Tap Issue option at the company’s discretion (with same warrant structure)
• Approx USD 50 million 1 to be paid to trade creditors by year end 2013
• USD 114 million excluding VAT of outstanding payables (USD 145 million including VAT) to follow a payment plan with final
payment on 15 July 2020
• 4% interest accruing from 2013
• Repayment in equal semi-annual installments starting in July 2015 subject to cash interest paid to the First Lien Bonds. All
payments subject to Free Cash Balance as defined 2 .
• 75% of all contracted Capex (or approximately USD 370 million) from 1 January 2013 to 31 December 2014 on fixed price
• Of the remaining 25%, 4% are contingencies, and approx. 11% are target costs with fixed unit costs but variable amounts, where
learnings from the installation of process line 1 have been used to verify amounts
• Capex increased by USD 37 million, but risk substantially reduced
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Governance
changes
USD 25-50m repair
issue
• Five new board members of seven total to be appointed by creditors, to complement two existing board members
• Three board members to be nominated by holders of existing bonds
• One board member to be nominated by holders of the new senior secured bond
• One board member to be nominated jointly by Metso and Peab
• Board to receive authority to issue 5% of the fully diluted equity post restructuring, plus additional shares for tap issue and
repair issue
• Public equity repair issue of minimum USD 25 million, and up to USD 50 million subject to bondholder approval, expected to be
launched post restructuring
• The Company’s share capital will be reduced from current CAD 51,417,889.90 to CAD 51,417.89 without the cancellation of
existing shares in the Company. The proceeds of the capital reduction shall not be distributed to the existing shareholders but
shall be allocated to the special distributable reserve of the Company.
1) In addition, approx. USDm 13 in payables cannot be deferred, and will be paid upon completion of financing
2) Metso and Peab interest and principal become payable from 2016, subject to available cash (See company press release
dated 29 April 2013 for detailed information on payment terms)
3) Subject to final agreement
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