GeoSentric Oyj - Company Announcement

FUNDING UPDATE – DISCUSSIONS WITH MAJOR HOLDERS ONGOING, A NON-BINDING FUNDING OFFER OF €250,000 RECEIVED

GEOSENTRIC OYJ      STOCK EXCHANGE RELEASE March 6, 2012 at 09:00 am





FUNDING UPDATE - DISCUSSIONS WITH MAJOR HOLDERS ONGOING, A NON-BINDING FUNDING
OFFER OF €250,000 RECEIVED 





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 reported on February 27, 2012 that it had received feedback
from a number of major holders that they wished to have additional time to
deliver possible investment commitments to the Company and the Company
therefore requested that the major holders respond to the Company with firm
investment commitments as soon as possible but in any event no later than March
2, 2012. Despite the extended deadline the Company is still engaged in
continued discussions with its major shareholders and potential investors. The
Company has not received any definitive investment commitments however it has
now 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 is now 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. The Company will update the market again as soon as these
discussions are completed and in any event no later than March 9, 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 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. 



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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