GeoSentric Oyj - Company Announcement

FUNDING UPDATE

GEOSENTRIC OYJ      STOCK EXCHANGE RELEASE February 27, 2012 at 12.45





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
as soon as possible. 



To address this issue and as announced on January 16, 2012, the Board has
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. 



The Company reported on February, 20, 2012 that it had received very limited
indications of interest to subscribe for the proposed Loan Note and that it had
therefore urgently contacted its known major shareholders again to request
feedback from them on appetite to invest in the proposed Loan Note or any
alternative terms or instruments that may be more acceptable or attractive to
them. The Company has now received feedback from a number of major holders that
they wish to have additional time to deliver possible investment commitments to
the Company. The major holders have therefore been requested to respond to the
Company with firm investment commitments as soon as possible but in any event
no later than March 2, 2012 with cash remitted to the Company no later than
March 9, 2012. 



The Company has already announced and confirmed directly with the major holders
that, 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 secondarily sought from its known major investors initial indications 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, including
purchasing GHNV equity (other potential buyers will also be sought), 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 DirectorsDistribution:

NASDAQ OMX Helsinki

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