GeoSentric Oyj - Company Announcement

FUNDING UPDATE

GEOSENTRIC OYJ      STOCK EXCHANGE RELEASE February 20, 2012 at 13:00





FUNDING UPDATE





As previously announced the Company did not raise the full targeted amount in
its Directed Rights Offering last year and, as a result, the Company has been
continuing to explore all options available to it to ensure that it has
sufficient liquidity to secure its operations through 2012 and beyond. The
Company's current cash resources are only sufficient to finance the business
into Q1 2012 and any alternative funding options should therefore be concluded
by the end of February 2012. 



To address this issue and as announced on January 16, 2012, the Board has
recently resolved to issue a secured interest-bearing loan note (”Loan Note”)
and accordingly the Board recently wrote to its known major shareholders
seeking to raise, through this instrument, a minimum of €350,000, and
potentially up to €500,000, depending on investor appetite, which would secure
the Company's liquidity at least approximately for the next 12 months and
potentially further depending upon the total amount raised. The proposed note
would use the 24% equity investment that the Company holds in GeoSolutions
Holdings N.V. (“GHNV”) as security and, subject to the right of first refusal
of Schroder & Company Limited (“Schroders”) to acquire the shares at the same
price, enables the repayment of the note in GHNV shares added with a redemption
premium should the Company not be able to repay the notes in cash. 



To date the Company has received very limited indications of interest to
subscribe for the proposed Loan Note. The Board has therefore today contacted
its known major shareholders again to request urgent feedback from them to
confirm the timeline for receiving the investment commitments for the Loan Note
and, if they feel they do not have interest to participate in the Loan Note, to
indicate if there are other terms or instruments that may be more acceptable or
attractive to investors to enable the Company to secure the required funding.
The major holders have been requested to respond as soon as possible and, in
respect of subscriptions for the proposed secured Loan Note, no later than
February 24, 2012 with cash remitted to the Company no later than February 29,
2012. 



In the absence of identifying any viable alternatives, the Board would be left
with no choice other than to seek an orderly disposal of the Company's assets
(which comprise almost entirely of its 24% equity investment in GHNV), which
ultimately could lead to a winding up of the Company. Given the previously
reported first preference of €5m that Schroders has over the assets of the
Company on any disposal or winding up, this is likely to lead to equity
shareholders receiving no final capital distribution on a winding up. In
anticipation that such an asset disposal may be the next step, the Board has
also sought from its known major investors initial indications of interest
(other potential buyers will also be sought) if they may wish to purchase GHNV
equity, or any part thereof, from the Company. As previously reported,
Schroders has a right of first refusal to acquire on the same terms any GHNV
shares proposed to be disposed of by the Company. 



Meanwhile the Board continues to retain and pursue, where appropriate, all
realistic strategic options open to it in order to raise the necessary finance
including another directed share offering, further cost cutting measures where
possible, asset sales and other possible sources of external finance. 





GEOSENTRIC OYJ



Board of Directors



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NASDAQ OMX Helsinki

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