GeoSentric Oyj - Company Announcement

FINANCING UPDATE, PROPOSAL FOR SHORT-TERM FINANCING APPROVED BY BOARD AND SHORT-TERM FINANCING RECEIVED, COMPANY TO CALL EXTRAORDINARY GENERAL MEETING

GEOSENTRIC OYJ        STOCK EXCHANGE RELEASE April 20, 2011 at 12:05





FINANCING UPDATE, PROPOSAL FOR SHORT-TERM FINANCING APPROVED BY BOARD AND
SHORT-TERM FINANCING RECEIVED, COMPANY TO CALL EXTRAORDINARY GENERAL MEETING 



The Company announced on March 25, 2011 that it had received a proposal for
short-term financing from its lead investor. As informed, the preliminary terms
indicated lead investor's willingness to convert its existing preferred
convertible notes (“Notes”) issued by GeoSolutions Holdings N.V. (“GHNV”) into
the shares of GHNV, leaving the Company as a minority shareholder in the GHNV. 



The Board has now completed the discussions with the lead investor and received
a final proposal (“Proposal”) from the lead investor. The Proposal guarantees
the Company and GHNV with immediately available 0.6M€ short-term financing,
enabling the Company to arrange an offering to its shareholders for securing
its middle to long term financing needs. This short-term financing will give
the Company runway through the Q2 and GHNV approximately until the end of April
by when the lead investor has agreed to provide GHNV with further funding under
the terms of the Proposal. As informed in the release on March 25, 2011 the
essential element of the Proposal is conversion of the Notes into the shares of
GHNV by the lead investor. Depending on Company's shareholders' willingness to
participate the financing, Company's holding in GHNV would be at maximum
approximately 21% and at minimum approximately 7% of GHNV after the
transactions stipulated in the Proposal. 



The Board has discussed the Proposal in depth with the lead investor to secure
the best possible terms for the Company's shareholders and other stakeholders
and acknowledges that it is the only proposal for funding that the Company has
received. Having carefully considered, amongst others, 



(i) the financing status of the Company and the difficulties that the Company
has faced in seeking financing; 

(ii) that the Proposal consists mainly of the exercise of the lead investors'
existing rights pursuant to the terms and conditions of the financing
arrangements approved by the Company's 2010 Annual General Meeting Shareholders
(the “2010 AGM”); 

(iii) that the 2010 AGM has authorised the Board to resolve on the issuance of
new shares and/or special subscription rights entitling to shares in the
maximum number of 850,000,000 shares in deviation of the shareholders'
pre-emptive rights and on such terms and conditions the Board deems appropriate
and that the terms and conditions of the additional financing offered under the
Proposal are essentially the same as the terms and conditions of the financing
arrangements approved by the 2010 AGM; 



the Board has concluded after diligent assessment that approving the Proposal
would be in the Company's best interest. The Board is also grateful to lead
investor's continued support when the other sources of funding have not been
available to the Company despite all efforts. The Board is satisfied with the
outcome, which despite major dilution of the Company's holding in GHNV, still
represents clearly better alternative compared to liquidation and preserves
some of the future upside potential. 



Therefore the Board has now approved the proposal and decided to call an
Extraordinary General Meeting to be held soonest to confirm this approval.
Accordingly the Board shall propose to the Extraordinary General Meeting to
confirm the approval of the Proposal by the Board of Directors except as
regards to above mentioned 0.6M€ financing raised already prior to
Extraordinary General Meeting. 



The Board has started the preparations to call the Extraordinary General
Meeting and the call will be released in the coming days, together with the key
terms of the Proposal. 



GeoSentric Oyj





For more information, please contact: investors@gypsii.com



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