GeoSentric Oyj - Company Announcement

FUNDING UPDATE – DISCUSSIONS REGARDING A NON-BINDING FUNDING OFFER OF €250,000 ARE ONGOING WITH A TARGET AGREEMENT DATE SET FOR MARCH 16, 2012

GEOSENTRIC OYJ      STOCK EXCHANGE RELEASE March 9, 2012 at 16:00





FUNDING UPDATE - DISCUSSIONS REGARDING A NON-BINDING FUNDING OFFER OF €250,000
ARE ONGOING WITH A TARGET AGREEMENT DATE SET FOR MARCH 16, 2012 





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 the Company has proposed issuing a secured
interest-bearing loan note and has been in contact with its known major
shareholders to seek their interest in such an instrument and to request their
feedback on any alternative terms or instruments that may be more acceptable or
attractive to them. On March, 6, 2012, the Company reported that, although had
not received any definitive investment commitments, it had received a
non-binding proposal from an independent advisory business representing a
number of investors for a funding of up to €250,000. The Company has been
engaged in active discussions on this proposal to answer a number of questions
that were raised and to secure acceptable terms for this proposed investment.
Based on these discussions the Company is now preparing a counter proposal to
the independent advisory business seeking to address their requirements while
securing the best possible terms for the Company. The Company has set a target
completion date of March 16, 2012 for finalisation of a definitive investment
agreement with cash remittance shortly thereafter. The Company will update the
market again as soon as these discussions are completed and in any event no
later than March 16, 2012. 



The Company has already announced and confirmed directly with the major holders
that, in the absence of securing 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 GHNV on any disposal or winding up, this is likely to lead to equity
shareholders of the Company receiving no final capital distribution on a
winding up. 



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



Distribution:

NASDAQ OMX Helsinki

Principal news media