GeoSentric Oyj - Company Announcement

FUNDING UPDATE – DISCUSSIONS REGARDING A NON-BINDING FUNDING OFFER COMPLETED. SIGNED HEADS OF TERMS RECEIVED. EXECUTION STILL SUBJECT TO APPROVAL BY LARGEST SHAREHOLDERS

GEOSENTRIC OYJ      STOCK EXCHANGE RELEASE March 30, 2012 at 16.10 pm





FUNDING UPDATE - DISCUSSIONS REGARDING A NON-BINDING FUNDING OFFER COMPLETED. 
SIGNED HEADS OF TERMS RECEIVED.  EXECUTION STILL SUBJECT TO APPROVAL BY LARGEST
SHAREHOLDERS 





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 it
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. On March 9, 2012, the
Company reported that it was 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. On March 16, 2012, the Company
reported that it had submitted a counter proposal to the independent advisory
business seeking to address their requirements while securing the best possible
terms for the Company.  And, on March 26, the Company reported that it had
received a response to its counter proposal, and was continuing active
discussions to secure the funding under the best possible terms, and that the
Company was aiming to finalise a definitive investment agreement in the next
few days. The Company has now completed the discussions and has received a
signed proposal from the independent advisory business for a funding of
€350,000. The proposal requires certain pre-conditions be satisfied before the
funding will be received by the Company. This includes certain terms that must
be agreed by existing Company's largest shareholders. The Company is actively
working on satisfying these pre-conditions. The Company is planning to invite
the shareholders' meeting to approve the funding. The Company will update the
market again as soon as these pre-conditions are satisfied and in any event no
later than April 03, 2012. 



The Company has already announced and confirmed directly with the major
shareholders 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 are comprised 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 €5 million 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 funding
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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